Menu Close

Libor-OIS Continues Rising, Nears Widest Spread Since October 2016 (Fed Rate Increases Matter)

(Bloomberg) — USD Libor-OIS spread widens to 41.8bp, widest since October 2016 and near the 43.7bp reached in September 2016 as the markets prepared for the SEC’s money-market reforms.

While the pace and scale at which Libor has set higher “seems unsustainable over the near term,” bank issuers have a “decent amount” of CP/CD borrowings coming due during March, which should keep upward pressure on funding cost.

The term London interbank offer rate (Libor) is the rate at which banks indicate they are willing to lend to other banks for a specified term of the loan. The term overnight indexed swap (OIS) rate is the rate on a derivative contract on the overnight rate. (In the United States, the overnight rate is the effective federal funds rate).

liborois.png

Yes, rate increases from The Fed are setting LIBOR rates into orbit.

fedlibor

To infinity … and beyond!

jerome-powell.600x400

Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

RSS
Follow by Email
LinkedIn
Share