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Some investors think a Fed hike could come in September thanks to a spike in Libor

Wall Street now believes there's a better chance of a September Fed hike, thanks to a rising benchmark interest rate that some experts believe will influence the central bank.

The three-month London Interbank Offered Rate — more commonly known as Libor — is around the highest level it's been since May 2009. The rate represents how much banks around the world charge each other for short-term loans, and helps determine global rates as well.

While Libor had been dwelling below 0.3 percent for more than two years, it began rising a year ago and has been climbing steadily since late 2015. Much of the gain can be attributed to money market regulatory changes happening in October that are pushing on short-term rates. However, there could be more to it.

Libor over the past year

Libor over the past year

Some experts believe it's a telltale sign that the Fed could get pushed into hiking rates before it wants to and before much of the market expects it to. CME traders who bet on fed funds futures currently assign a 24 percent chance of a move in September, which while low is considerably higher than it's been lately. Just a few days ago, the chance...


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