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News Release | NR 26-15

FCA board receives updates on Farm Credit System funding conditions and deregulatory actions, acknowledges Veterans Day

McLEAN, Va., November 5, 2026 — At its monthly meeting today, the Farm Credit Administration (FCA) board received a briefing on funding conditions for the Farm Credit System (System) (PDF) and a report on FCA’s deregulatory actions (PDF). FCA Chairman Jeffery Hall also offered remarks honoring Veterans Day.

Farm Credit System funding conditions

The System primarily funds its lending activities and other financial services to farmers, ranchers, and rural communities by selling Systemwide debt securities to investors. Today’s briefing included trends in the System’s outstanding debt, debt issuance, and borrowing costs, among other topics.

Outstanding debt and debt issuance

As of Aug. 31, 2026, the Farm Credit System had $480 billion in outstanding debt. Outstanding debt is the amount the System has borrowed through debt securities that have not yet been repaid. The System’s outstanding debt has increased steadily since 2022, growing by more than $90 billion, or 24%. Growth in outstanding debt levelled off through the first eight months of 2026, partly because elevated inflation reduced loan demand. As of Aug. 31, the System accounted for 22% of all outstanding government-sponsored enterprise debt.

During the first eight months of 2026, the System maintained good access to funding markets, with debt issuance on track to exceed 2025 levels. The System regularly issues new debt to replace maturing securities and support its lending activities. Annual debt issuance fluctuated from 2022 through 2025, declining overall by $48 billion, or 12%. This decline primarily reflected changes in the System’s balance sheet and reduced refunding needs.

Borrowing costs

Interest rates generally declined in late 2024 and throughout 2025, slightly reducing the System’s overall borrowing costs. In 2026, the Federal Open Market Committee (FOMC) kept rates steady until September, when it increased the federal funds target range by 25 basis points. Factors influencing the FOMC’s decision included inflation exceeding its 2% target, economic conditions, and geopolitical developments. These conditions, and expectations about future interest rates, have limited the System’s opportunities to refinance existing debt at lower costs.

The Treasury yield curve, which shows how bond yields vary across different debt maturities, has shifted upward, indicating higher benchmark borrowing costs. Persistent inflation pressures, monetary policy expectations, concerns over federal deficits, and continuing capital demands related to super intelligence contributed to the shift.

Risk premiums, which are the additional interest investors require on debt securities compared with benchmark securities, remained generally stable and favorable for the System’s fixed-rate non-callable debt. However, premiums for fixed-rate callable debt increased during periods of elevated market volatility. Premiums for floating-rate debt have also increased recently because of greater competition from Federal Home Loan Bank obligations and Treasury bills. Despite these increases, risk premiums remain favorable, reflecting investor confidence in the System’s financial strength and performance.

Other topics

The briefing also covered the following topics:

  • The System’s investment holdings, including whether they provide sufficient liquidity to meet funding needs without issuing additional debt.  
  • Federal Reserve and other central bank actions, geopolitical developments, and credit ratings and their effects on the System’s funding conditions through Aug. 31, 2026, and potential effects for the remainder of the year.

Deregulatory actions

FCA completed seven deregulatory actions in 2026 to modernize regulatory requirements, reduce administrative burden, and align agency expectations of the System with current technology, accounting standards, and leading industry practices. These actions are expected to save System institutions more than $4 million annually. The initiatives reflect FCA’s ongoing commitment to reducing regulatory burden while ensuring the safety and soundness of System institutions and supporting the farmers, ranchers, and rural communities they serve.

Honoring Veterans Day

FCA Chairman Jeffery Hall offered the following remarks honoring Veterans Day:

“Veterans Day gives us an opportunity to recognize and honor the men and women who have served in our nation’s armed forces. Their service and sacrifice have helped protect the freedoms and opportunities we enjoy today.

“I want to extend a special thank you to the 26 men and women of FCA and FCSIC who are veterans that work here alongside us. Your commitment to serving our country did not end with your military service. You continue to serve the American people through your work here, and we are grateful for the experience, dedication, and perspective you bring to our mission.

To all our veterans, thank you for your service and for all you continue to contribute to our country.”