The Treasury’s decision not to extend the majority of the Fed’s emergency lending facilities beyond the end of the year is unlikely to have a major impact on the economy given that those facilities made just $25bn of loans. At the margin, however, it could raise the likelihood that the Fed will attempt to provide more stimulus using its other tools, most likely by increasing the pace of its monthly asset purchases.

Read the publication 13(3) decision could be net positive for the economy on the Capital Economics Website.

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