Another Fed auction has gone off and for the third time in a row, banks are paying higher interest rates.
On May 5, 2008, the Federal Reserve conducted an auction of $75 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:
Stop-out rate: 2.220 percent
Total propositions submitted: $96.618 billion
Total propositions accepted: $75.000 billion
Bid/cover ratio: 1.29
Number of bidders: 71
For weak dollar foes, this is good news, as climbing rates will give strength to the dollar and ought to help with rapidly rising commodity prices.