Repayment of BTFP loans increased slightly last week, but there’s still around $125 billion outstanding. Weekly data on assets and liabilities for commercial banks indicate a significant gap in their balance sheets, suggesting the banking crisis isn’t over. The Fed Discount Window saw a 27% increase to $6.79 billion this week, with a focus on smaller banks and their strategies for solvency. Amidst other developments like Powell’s stance on inflation, it’s noteworthy that loans from the discount window have hit their highest level in a year. While not at crisis levels yet, the “lender of last resort” has been more active since the BTFP closed. Additionally, mortgage rates have risen for the fifth consecutive week, with the 30-year fixed rate at 7.42%, signaling potential challenges ahead in the housing market.
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Repayment of BTFP loans picked up slightly last week, but there's almost $125 billion to go and, judging by the weekly data of assets and liabilities for commercial banks, there's nothing to plug that big of a hole in their balance sheets – the banking crisis isn't over… pic.twitter.com/ZOE6t2kyQu
— E.J. Antoni, Ph.D. (@RealEJAntoni) May 2, 2024
🚨**Breaking Fed News!**
**Fed Discount Window Update**
📈**Increase:** Up 27% to $6.79 billion this week!– **Focus on Smaller Banks:** Continued emphasis on their impact and strategies to stay solvent pic.twitter.com/RWbJj1eo8o
— The Coastal Journal (@1CoastalJournal) May 2, 2024
W/ everything else going on, like Powell giving up on inflation, did anyone notice loans from the discount window just hit highest level in a year? We're not at crisis levels, but since the BTFP closed, the "lender of last resort" has been busier than normal.
Food for thought… pic.twitter.com/oJYT5nhS3i— E.J. Antoni, Ph.D. (@RealEJAntoni) May 2, 2024
Delinquencies 🔜 🚀 t.co/MX6xEVW1Fc pic.twitter.com/dNMatx30hL
— The Great Martis (@great_martis) May 2, 2024