Overnight USD Libor fell to the lowest level on record on Monday as Washington continues to hammer out a $15 billion short-term loan to Detroit's auto industry, and U.S. President-elect Barack Obama continues to distance himself from the TARP, favouring his own fiscal stimulus plan.
According to CNBC on Monday, congressional leaders are nearing a $15 billion short-term loan to General Motors, Ford and Chrysler, which could be voted upon as early as Tuesday.
The Journal also reported that Obama's transition team is resisting working with the Bush administration on the TARP due to the congressional dislike for the program. The Obama administration prefers to focus on a $500 billion fiscal stimulus plan and distance itself from the TARP.
Meanwhile, the Financial Times said that Obama's stimulus plan for infrastructure projects are far more detailed than the rhetoric from speeches. The plan includes spending on roadwork, bridges, internet broadband, schools, energy efficiency, and health spending.
Overnight USD Libor fell another 9 bps to 0.19% on Monday while three-month Libor was little changed at 2.19%.
The libor/OIS spread widened 2 bps to 192 bps.
According to Bloomberg data, this is the lowest overnight USD Libor on record.
By Erik Kevin Franco and edited by Nancy Girgis
©CEP News Ltd. 2008