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"Cracks Continue To Multiply": BofA Warns Fed Must Slow Down Now Or Risk Breaking The Corporate Bond Market

Tyler Durden's Photo
by Tyler Durden
Saturday, Oct 08, 2022 - 01:44 PM

Two weeks ago, the unprecedented global tightening of the past year finally broke the UK pension market, and forced the BOE to become the first central bank to pivot (at least until next Friday, Oct 14, when the BOE's "temporary" QE is scheduled to end; we'll see if it does). It then sent the even critical FRA-OIS indicator of interbank funding stress sharply higher suggesting an ominous drop in interbank liquidity...

... followed by the SOFR Swap Spread which blew out the most on record, a harbinger that something was breaking in the Treasury market as well.

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