March 6 (Bloomberg) -- Credit trading models used by Wall Street have gone haywire, raising company borrowing costs even as Federal Reserve Chairman Ben S. Bernanke cuts interest rates.
Rising low-grade bond yields, due to rising risk premium, undermine the positive affect of lower short-term interest rates. They reflect a tight credit market in spite of huge availability of liquidity in the banking system.
In other words, the markets are tightening and there is nothing the Fed can do about it. Unless they become more aggressive.
More on https://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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