Fed Discount Window Weekly Update

This week’s Primary Credit activity at the Fed’s Discount Window:

• This week’s primary credit balance was $6.2 billion, down from $6.8 billion the week prior. We expect this number to eventually rise in 2024 so long as rates remain elevated. Elevated rates create unrealized losses for the Banking sector which causes banks to become more conservative in their lending practices. Should the Fed begin to cut rates in June, Bank unrealized losses will abate and the Banking sector will strengthen.

Source: Federal Reserve

Federal Reserve Balance Sheet: Factors Affecting Reserve Balances - H.4.1: https://www.federalreserve.gov/releases/h41/current/

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