Monday, August 8, 2016

Interest Rate Disparity

Here is a graph detailing the 3-month LIBOR and the Effective Federal Funds Rate the last few years. Note how quickly LIBOR has been heading up lately while the Federal Funds Rate is stagnant per Fed policy.  For those not aware LIBOR is set by a group of banks in Europe so it's market based. It stands for London Inter-Bank Offered Rate.

What is the Fed waiting for? The rest of the market clearly got the signal this summer.

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