Overnight lending rates are the story in the interbank lending market with the Libor rates falling back below the Fed's 1.00% target rates.
The news comes as the Treasury Department continues to mull whether or not to tap the second tranche of the $700 billion TARP, despite criticism from Capitol Hill.
While Treasury Secretary Paulson announced plans to leave the funds to the next administration and his successor, Timothy Geithner, the Journal argues that that worsening economic conditions are pressing for faster action from the Treasury.
In addition, the Big Three Detroit automakers, Ford, Chrysler and General Motors, are back on Capitol Hill to plead for government aid, this time requesting $34 billion, up from the $25 billion requested just weeks ago.
According to the British Bankers' Association on Wednesday, U.S. overnight libor rates fell 22 bps to 0.80% while the three-month libor declined 1 bp to 2.20%.
The Ted spread narrowed 1 bp to 215 bps and the Libor/OIS spread fell 1 bp to 183 bps.
The Fed funds rates also opened at 0.4375% this morning.
By Erik Kevin Franco and edited by Nancy Girgis
©CEP News Ltd. 2008