Emergency Loans from US Fed to Banks Increase for Second Week

The US banking sector increased emergency borrowing from the Fed for a second straight week, highlighting continued pressure on the financial system after a string of bank failures last month. Data released Thursday showed that the Fed extended loans to financial institutions through two backup lending instruments totalling $155.5 billion in the week ended April 26, compared with $143.9 billion the previous week. The continued bumpy road to recovery in the banking sector could complicate the decisions facing Fed officials at next week's monetary policy meeting. The market is widely expected to see the Fed raise its benchmark rate above 5% to keep downward pressure on inflation at bay. The Fed's weekly balance sheet data showed outstanding borrowings from the conventional backup lending programme stood at $73.9 billion, compared with $69.9 billion the previous week and a record $152.9 billion last month.
Demand for new bank term loan programs increased to $81.3 billion, compared with $74 billion the previous week.