Born To Run! Libor Rises for 30th Straight Day Ahead of Fed Decision (Highest Since Financial Crisis)

With a rate increase a foregone conclusion when the Federal Reserve concludes its two-day policy meeting on Wednesday, traders have been actively pricing it in. The three-month U.S. dollar London interbank offered rate, or Libor, which is one of the benchmarks for setting borrowing rates worldwide, has been on the rise since Feb. 7, reaching 2.25 percent, the highest since 2008 (and the financial crisis).


Meanwhile, its gap over similar-maturity risk-free rates, known as the Libor-OIS spread, has more than doubled since the end of January to 55 basis points, a level unseen since 2009.


With The Fed taking its foot off the monetary brakes (at long last), Libor and the Libor-OIS are “born to run.” UP!

Here is my friend, Atlanta Fed’s President Raphael Bostic, and Fed Chair Jerome Powell.


30-year Treasury Auction Strong With $13 Billion Sold To Public (None Bought By The Fed)

Today’s US Treasury 30-year bond auction was strong. $13 billion were sold to the public  and none purchased by The Fed for the first time since the December 12, 2017 auction.


So far, so good. Despite massive Federal spending and projected budget deficits, Treasury auctions are going well.

The 10-year T-Note Volatility index (TYVIX) has declined to around 4.


Fed Boogie: Cboe Equity Put/Call Ratio Nearing Pre-meltdown Levels

The Cboe Equity Put/Call Ratio is nearing pre-meltdown levels. Since the index measures the volume of equity puts versus calls, it will rise on an increase in bearish bets and fall when demand is greater for bullish ones. The ratio peaked this year at .88 on Feb. 9 following the market’s 10 percent drop to start that month.


The CBOE S&P500 Volatility Index (or VIX) is almost back to pre-meltdown levels too,


The 10-year T-Note volatility index is actually below the February meltdown level, but above the January and early February levels.


The market is stabilizing as The Fed engages in The Fed Boogie.


Interest rates: Get up, get up.