The U.S. Federal Reserve eased another $2 million in emergency loans this week to help struggling U.S. businesses amid the recession. The Fed’s overall asset portfolio reported growth for the second week, holding above $7 trillion.
The Fed’s loan balance under its Main Street Lending Program increased from $12 million last week to $14 million.
The program was created to provide assistance to small businesses and medium-sized companies affected by the pandemic. However, the program has taken a slow start, prompting criticism from U.S. lawmakers.
The Fed’s total balance sheet size grew by $6.1 billion to more than $7.01 trillion as of July 22. The increase was due to purchases of Treasuries and mortgage-backed securities to keep financial market conditions afloat.
Meanwhile, other facilities and financial markets continued their pattern of limited demand after the Fed slashed interest rates to zero and released various emergency credit programs in March. That caused the $3 trillion build in the Fed’s balance sheet between March and June.
Analysts at TD Securities maintain their forecast that the Fed’s total balance sheet will hit $9.4 trillion by the end of 2020 and $11 trillion by the end of 2021.
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