Fed rates mean nothing. What does matter are LIBOR-OIS spreads (unsecured lending versus effectively pure interest rate risk consideration) and TED spread (Treasury versus real lending rates).
You could have 0% Fed rate and still have frozen credit if nobody in the banking system trusts anybody else.
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Fed rates mean nothing. What does matter are LIBOR-OIS spreads (unsecured lending versus effectively pure interest rate risk consideration) and TED spread (Treasury versus real lending rates).
Sep 25 23:52 pm
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All Comments by lavalyn »Another Day Without Precedent [View article]
You could have 0% Fed rate and still have frozen credit if nobody in the banking system trusts anybody else.