Although Libor rates have eased over the last week, don’t bet on the month ahead being a smooth one for money markets.
Funding in wholesale U.S. dollar markets had become more expensive of late, with one-month and three-month Libor—the rate at which banks lend money to one another—reaching their highest level since 2009. Higher Libor rates haven’t happened because investors believe interest rates will be higher in the future, since overnight interest-rate swaps—a market gauge of the future level of rates—haven’t risen at the same pace.
The full article is available at the Wall Street Journal website.
