Federal Reserve holds emergency session as dollar funding stress spreads to energy markets

The Federal Reserve convened an unscheduled meeting of the Federal Open Market Committee to address dollar liquidity stress in global energy markets. European and Asian banks report growing difficulty settling dollar-denominated oil trades as counterparties increasingly demand BTC or local currency. Fed Chair Powell reportedly discussed swap line expansions and a dedicated energy liquidity facility. Dollar funding stress during an oil crisis is not new. What is new is that borrowers have an alternative this time. The Fed is not fighting a liquidity crunch. It is fighting relevance.