At its monthly meeting, the Farm Credit Administration board received an update on the Farm Credit System’s funding activities.
According to the update, the System had $314 billion in debt outstanding as of Nov. 9, amounting to a 6.9% increase from year-end 2019. As of Sept. 30, the System’s share of the $1.76 trillion debt market for government-sponsored enterprises was 17.5%, ranking second only to the Federal Home Loan Bank System, which held a share of 48%.
The dominant influence on funding conditions throughout nearly all of 2020 continues to be the global spread of COVID-19. The economic effects at the outset of the pandemic during the early spring drove debt yields and equity markets down sharply, inducing unprecedented amounts of volatility that severely constrained liquidity and the functioning of financial markets. In response, the Federal Reserve sharply cut and actively maintains the federal funds rate at a target range between 0% and 0.25%. In addition, the Federal Reserve announced numerous actions to provide critical support for the economy and the debt markets.