by Bill McBride on 1/13/2009 01:25:00 PM
Tuesday, January 13, 2009
Here are a few indicators of credit stress:
The TED spread was stuck above 2.0 for some time. The peak was 4.63 on Oct 10th. The TED spread has finally moved below 1.0, although 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. If the credit crisis eases, I'd expect a significant further decline in this spread - although this is good progress.
By these indicators, the Fed is making progress.
Posted by Bill McBride on 1/13/2009 01:25:00 PM