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Demand for Fed funding tool hits record before rate hike

By Economic Times - 10 months ago
Borrowing from the Federal Reserve's emergency lending program, the Bank Term Funding Program (BTFP), reached a record high of $167.8 billion. Demand for the program increased by $6.3 billion in the week leading up to January 24. The BTFP's interest rate had fallen below the rate at which institutions could earn money by parking reserves at the Fed, leading to an arbitrage trade.

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