Reuters carry the report on discussions between European central banking and supervisory officials questioning whether they can still rely on the U.S. Federal Reserve to provide dollar funding in times of market stress
- Reuters cite “six people familiar with the matter”
- sources told Reuters they consider it highly unlikely the Fed would not honour its funding backstops — and the Fed has given no signals to suggest that
- but, given the dismantling of long-standing U.S. policy in several areas by Trump, the question is being raised over the possibility the U.S. government might pressure the Fed to suspend the dollar backstops
The Federal Reserve providing USD funding during periods of financial stress is a keystone of financial stability.
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This article was written by Eamonn Sheridan at www.forexlive.com.
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