Commercial Paper Funding Facility (CPFF)

The Commercial Paper Funding Facility (CPFF) is a tool used by the Federal Reserve to support short-term loans that companies use to fund their daily operations. During times of financial stress, the CPFF helps ensure that businesses can access affordable funding by purchasing their commercial paper—short-term debt instruments—thus increasing liquidity and stabilizing markets. Essentially, it acts as a backstop, encouraging companies to continue borrowing and investing, which helps maintain overall economic stability.