Tuesday, May 5, 2009
The TED spread has fallen to just under 80 bps, which is just a few basis points away from levels last seen in 2007. The spread has narrowed recently due to declines in 3-mo. Libor and to increases in the yield on 3-mo. T-bills. That reflects two positive developments: lower Libor shows improving confidence in the banking system, and higher bill yields represent a reduction in the world's desire for safety.
Posted by Scott Grannis at 10:16 AM