Banks Pile Into Treasurys, Helping to Fund Government Borrowing Spree

Surging deposits and declining lending are driving banks to dramatically increase their holdings of U.S. Treasurys, offering significant support to the bond market at a time of massive government borrowing. Holdings at U.S. commercial banks of Treasury and agency securities other than mortgage bonds have grown by more than $250 billion since the end of February as their total deposits have jumped by more than $2 trillion, according to Federal Reserve data. Commercial and industrial loans initially spiked as companies drew…

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