Term Deposit Facility (TDF)
1) Circumstances that led to its creation: Over $1 trillion in excess reserves caused concern at the FED that these funds could cause inflation when withdrawn. The Term Deposit Facility was designed to drain funds from banks by paying interest on funds that are deposited in the TDF for a determined period of time.
2) Intended beneficiaries: The banks receive interest on their deposits, but the purpose of the program is to be a tool for curbing potential inflation rather than benefiting the banks.
3) The program has received a total of $12,628,720,000 in deposits over its four 28 day terms with $5,113,410,000 being the largest amount of deposits in any one 28 day term. The program intends to take in two more 28 day $5,000,000,000 deposits.
4) My assessment: The program is currently being instituted only as a test of its readiness and has performed well so far. Whether or not it will be a useful tool for fighting inflation has yet to been seen.
Begin Date: June 14th
End Date: The program is ongoing.
Spending Authorized: So far it has only been authorized for interest payments on small $5 billion test deposits.
Peak Spending: Interest paid on $5,113,410,000 deposit
Current Spending: Interest paid on $5,113,410,000
