Bank Counterparty Risk Surges To 4-Year High
Which makes one wonder whether The Fed rate hike was – as we detailed here – an implicit bailout for foreign (read European) banks?
But the pace of increase is extremely worrisome historically
The Fed just hiked into this massive two-week surge in TED spreads; as opposed cutting by 75 bps in 2008 and unleashing more QE at Jackson Hole in 2011! That hike seems akin to what happened in Sep-08 when Lehman went Bankrupt.
(h/t Brendan Ferro)
US financials credit risk continues to push wider (with stocks remaining cognitively disssonant for now).
With the Fed’s own National Activity Index tumbling, its own Financial Stress Index soaring, and now major concerns about the US financial system’s stability looming, one has to ask, how long before Janet unleashes the next QE?
