Fed Emergency Loans Rise Again Amid Renewed Financial Stress

via YAHOO:

(Bloomberg) — Just when it seemed the US regional banking strains were starting to ease, First Republic Bank has leaped back into headlines, reigniting concerns of rising pain in the lending system.

Banks increased emergency borrowing from the Federal Reserve for the second week in a row in a sign of the ongoing stress in the system. Last week, the New York Fed reported that financial conditions in its region had deteriorated sharply.

The trouble is rekindling concern that a credit crunch is underway. And it further complicates the plan for next week’s Fed policy meeting, where officials have to figure out how to balance the risks of tighter borrowing conditions against stubbornly high inflation.

BlackRock Inc. said recently that 60/40 doesn’t work in an environment where central banks are likely to raise interest rates into a recession to bring down inflation.

Data in recent days has validated that concern, showing US inflation accelerated while growth slowed pic.twitter.com/ii4XDScgvF

— Cheddar Flow (@CheddarFlow) April 29, 2023