by Bill McBride on 1/05/2009 04:50:00 PM
Monday, January 05, 2009
The London interbank offered rate, or Libor, for three-month dollar loans may hold near the lowest level in 4 1/2 years as central banks inject money into economies and financial companies to combat the credit squeeze.Imagine all those adjusted rate mortgage loans tied to treasuries or even the 3 month LIBOR? The rates are looking pretty good!
The rate was at 1.42 percent...
The TED spread was stuck above 2.0 for some time, but has been steadily moving lower over the last few weeks. The peak was 4.63 on Oct 10th. I'd like to see the spread move back down to 1.0 or lower. A normal spread is around 0.5.
This is the spread between high and low quality 30 day nonfinancial commercial paper. Right now quality 30 day nonfinancial paper is yielding close to zero. This may be holiday related, but this is significant decline.
It appears the Fed is finally getting some rates down ... the A2P2 spread decline is worth watching.
Posted by Bill McBride on 1/05/2009 04:50:00 PM