The U.S. banking industry is grappling with a number of major problems after bank collapses such as Silicon Valley Bank. Many different banks are also thought to be at risk. JPMorgan According to Chase & Co, the Federal Reserve had to alleviate the ongoing liquidity crisis in the country.
According to JPMorgan, Fed‘s emergency loan program is expected to bring $2 trillion worth of funds to the US banking system. In this way, it is expected that the current liquidity problems will be solved temporarily.
This program was put into use as a result of the problems experienced in three banks in the USA, which we reported as Koinfinans.com. The program was created to provide these institutions with an additional source of liquidity. It will also quickly eliminate the need to sell securities during a crisis. According to JPMorgan strategists, the Bank Term Funding Program will be able to add enough reserves to the banking system to reduce the reserve shortage.
While the big banks are not expected to use the program in question, there is information in the press that the maximum usage will be limited to 2 trillion dollars. This figure is equal to the value of bonds held by US banks, excluding the five largest corporations.
It should also be noted that a significant portion of the $3 trillion reserve currently available in the US financial system belongs to large banks. JPMorgan strategists believe that the Fed’s quantitative tightening and rate hikes that led to a shift from bank deposits to money market funds will be blamed for tighter liquidity.
Will the Move Between Fed and Banks Benefit Cryptocurrencies?
BitMEX co-founder Arthur Hayes said: bitcoin and getting ready for the crypto rally stated.
Hayes says he believes the Fed will have to stop interest rate hikes altogether and start injecting money back into the system, paving the way for capital flows into risky assets and crypto markets in particular.
That’s a fucking savage move in the 2yr. In case you think this is something other than what it is. The bond market is saying it’s back to print dat money mode. Don’t fight the Fed!!!! pic.twitter.com/dPWQeHt9j9
— Arthur Hayes (@CryptoHayes) March 13, 2023
You can follow the current price action here.
Source : Watcher.guru & The Daily Hodl