Fed Discount Window Weekly Update
This week’s Primary Credit activity at the Fed’s Discount Window:
This week’s primary credit balance was $7.0 billion, down from $8.6 billion the week prior.
I would expect more banks to tap the primary credit window as yields move higher, although the Fed is likely to ease the pace of its QT effort by June, which will make life easier for the banks and put downward pressure on yields. This means that bank unrealized losses will start to come down once the Fed eases the pace of its already modest QT effort. Once that happens, banks will add more liquidity to the economy by extending more credit.
Federal Reserve Balance Sheet: Factors Affecting Reserve Balances - H.4.1: https://www.federalreserve.gov/releases/h41/current/