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No Chance Of A Rate Hike Today As LIBOR Stirs
As the attached chart demonstrates, Bloomberg interpolates that there is not even a 1% probability of Fed hike today. The earliest possible hike date is April 28, and even then the probability of a raise to 0.5% is 4.8%. The subsequent date, June 23, has a 14.8% probability of a 14.8% increase, and 0.7% to 0.75%.
And even as all is quiet on the Fund Futures side, something is stirring in the Libor market, where 1 week LIBOR has moved to October 2009 levels overnight (in absolute terms, the move from 0.2% to 0.221% is of course a joke; massively leveraged, however, is a different story).
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another reason for the market to go up... no rate hike
It's official. No change.
April 28 of what year?
The last one.
The punchbowl stays and will be refilled with endless taxpayer dollars for an extended period. What changed?
someone please translate the implications of the post.
Let me try:
Bears = screwed.
Libor here can be interpreted as an early warning if rising without reason. It could portend increased fear and a sort illiquidity to come. A canary in a coal mine analogy.
thank you, that is what I thought.
crzyhun, emergency rates can not persist for ever, except at the FED of course. Here the market is beginning to take over. TD's chart shows the downtrend has ended, a base formed & a retracement back to a Fibonacci level. All very normal even if the interest rate involved is extremely small incrementally. Libor is confirming the upturn in the UST T-bills. The market will advance the rates ahead of the FED as they always do. Look to Libor & T-bills.
http://i43.tinypic.com/2q3ye5c.jpg
"June 23, has a 14.8% probability of a 14.8% increase"
Does this send Fed Funds 15.05% to 0.287%?
IMO LIBOR rates are moving up because of renewed attention (regulatory and legislative) on the dangers of "creative" accounting. Let's see if anyone else is going to confess to past or current accounting transgressions? Lack of trust was a big reason why LIBOR spiked in 2008.
I tend to agree that this may be a canary in the coal mine situation. This is certainly worth watching very closely.
+1 TRUST is the salient word here. A spike in Libor effectively says banks no longer trust each other to repay intrabank loans. In a total clusterfuck scenario it would rise high enough that banks stop lending to each other entirely - and who knows, maybe the automatic teller machine systems that we all rely on day to day might stop working altogether.
I have a veggie patch. I dont think its big enuff....
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