Banking giant JPMorgan claimed that the Fed’s emergency loan program would provide $2 trillion of liquidity to the US banking system.
According to JPMorgan, close to $2 trillion in funding could be injected into the US economy with the Fed’s emergency loan program. This move aims to eliminate the liquidity crunch in the economy by preventing the recent banking crises.
In addition, JPMorgan strategists stated that although there is still a reserve of $ 3 trillion in the US banking system, most of it is held by the largest banks.
$2 Trillion Move to the US Economy
JPMorgan stated that a new loan program created by the Fed will provide $2 trillion of liquidity to the market.
“The use of the Fed’s Bank Term Funding Program will likely be massive,” a group of strategists in London wrote in a client note Wednesday. said. Strategists noted that while the largest banks are unlikely to benefit from the program, the maximum projected use for the program is close to $2 trillion.
This liquidity move, which JPMorgan and other strategists focused on, came after the recent bank crashes. US officials created this program to raise funds and prevent the sale of government debt after banks went bankrupt.
JPMorgan stated that the Bank Term Funding Program should solve the liquidity problems that have arisen recently. In addition, JPMorgan argued that there should be sufficient reserve inflows into the banking system to reverse the tightening that took place last year.
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