Fed May Upsize FIMA Facility Amid Bond Market Growth

Treasury Secretary Scott Bessent believes it's reasonable for the Federal Reserve to consider increasing the size of the FIMA facility, a stopgap liquidity facility that Japanese authorities are eyeing to prop up the yen. This comes after a joint US-Japan intervention last week to support the currency.

The FIMA facility was created in 2020 when the bond market was smaller than it is today, Bessent noted. He stated that it would be reasonable for the Fed to consider upsizing the facility given its growth since then.

Bessent emphasized that the FIMA facility is a secure lending facility, and countries posting collateral can borrow money from the US through it. This is similar to swap lines, which are already in place.