TLDR: The Federal Reserve’s emergency lending program, known as the Bank Term Funding Program (BTFP), has become a source of “easy money” for banks. Under the BTFP, banks can borrow funds from the Federal Reserve at a rate tied to future interest-rate expectations, allowing them to earn a higher return by parking the funds as overnight deposits at the central bank. Initially, borrowing from the program was costly, but a significant reversal in rate expectations has made it more attractive for banks. However, the benefits of the program are temporary, as it is set to expire on March 11, unless extended. Additionally, increased usage of the BTFP may not significantly ease the pain from higher deposit costs for the banking industry. The program was established in response to the 2023 banking crisis and aimed to restore confidence among depositors and provide banks with access to ample funds.