Fed Earthquake

March 11th, 2008 8:09 am | by John Jansen |

The Federal Reserve has acted to soothe the troubled markets with another massive injection of liquidity on top of what was announced on Friday. In effect they are selling Treasuries to buy spread product. They will even take private label non agency collateral from the dealers. This should provide a massive confidence boost for the spread markets and providesolid reason for some investors to wade back into that market.

The Treasury curve has reacted rather dramatically with the yield on the 2 year note jumping 20 basis points to 1.78 percent. The yield on the 10 year note is back to 3.60 percent and the curve has collapsed to 182 basis points.

Be Sociable, Share!

Post a Comment