From Wall Street Journal:

During the 2023 banking crisis, the Federal Reserve introduced an emergency lending program. However, this program has now evolved into a source of easy money. Borrowing from the Fed’s bank term funding program has surged to new highs in recent weeks. This unexpected trend is a result of the market’s anticipation of multiple Fed rate cuts over the next year. This summary provides an overview of how the Federal Reserve’s emergency lending program has led to increased borrowing and the market’s outlook for future rate cuts.



Read more: The Fed Launched a Bank Rescue Program Last Year. Now, Banks Are Gaming It.