LIBOR hits 3-month high
The London interbank offered rate jumped to its highest point in nearly three months, up two basis points and topping off at 0.65%. This increases the cost of borrowing the US dollar on the back of anticipation that US policy makers will increase interest rates by the end of 2009. The London-OIS spread is a measure of the unwillingness of banks to lend, and it climbed three basis points which helps further conclude the increased costs of borrowing.
Bets are being made that the Federal Reserve will raise its base interest rate by year's end, following signs that the global economy is making strides out of the deepest slump in over 60 years. The percentage of positive bets has doubled over the past week, up from a previous 16% vote of confidence.
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