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TED Spread Drops Below 200 as Credit Markets Begin Thaw
The TED spread, a mark of willingness to lend in the credit markets, has fallen below 200 today. The 19.2% decline in the spread, as of 2:41 p.m. ET, indicates that the credit markets are thawing.
The TED spread which measures the difference between three-month Treasurys and the three-month Libor rate. The TED closed at 464 on Oct. 10, the highest spread in over a decade, as lenders demanding increasingly higher premiums from borrowers.
Overall, the TED spread’s contraction today is good news for the banking industry.
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