Weekly Market Snapshot – March 30th, 2020
Created by: Sam Tenney
- As of March 26th, domestic banks are no longer required to keep any cash reserves on hand with the federal reserve banking system. Generally these reserve’s help shore up liquidity mismatch in the market so banks always have cash on hand to cover deposits, making this legislation concerning given the current market environment.¹
- Initial unemployment claims from the US department of labor came in at 3.28 million claims for the week, the highest single period of unemployment claims since recording started. This is *4 the peak of unemployment in 2008.²
- As of March 23rd, the Federal Reserve has initiated the Term Asset-Backed Securities Loan Facility (TALF). TALF’s goal is to issue securities backed by student loans, credit card loans, and auto loans among other consumer facing loans. This is accomplished by buying the underlying assets, meaning this facility is to largely take underwater assets off the open market and get them onto the fed’s balance sheet instead.³
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