Fed Discount Window Weekly Update
This week’s Primary Credit activity at the Fed’s Discount Window:
This week’s primary credit balance was $6.6 billion, down slightly from $6.7 billion the week prior.
We continue to believe that banks’ significant unrealized losses will cause them to further contract credit in 2024 and 2025. The FDIC released the below chart earlier this week. Smaller banks may face liquidity crunches as that happens which will force them to tap the Fed’s discount window (the above chart).
Federal Reserve Balance Sheet: Factors Affecting Reserve Balances - H.4.1: https://www.federalreserve.gov/releases/h41/current/