Ending the BTFP emergency lending program and lowering Fed rates is a balance of American monetary policy on the way to a sustainable economy

The US Federal Reserve expects to complete the Bank Term Funding Program (BTFP) to provide term financing to banks and increase liquidity in March 2024.

This instrument was introduced after the collapse of Silicon Valley Bank and Signature Bank, while dozens of other regional banks experienced sudden deposit outflows.

The state-supported uninsured deposits in banks through the BTFP mechanism reassure depositors and contain negative developments in the banking system, as even a small withdrawal of deposits could be fatal for any bank with large unrealized losses in its securities portfolio.