Bernanke offers only light relief as senior spreads widen
With Wednesday’s Federal Open Market Committee meeting finally out of the way, bank treasurers can get back to looking at their secondary levels and seeing if a primary deal makes economic sense. But with investors pricing in fears sparked by Fed chairman Ben Bernanke’s plans to reduce the US government’s asset purchase programme this year, with a view to ending it altogether in 2014, as long as his conditions are met, bankers worry that many borrowers will be unwilling to issue.
The Fed left policy unchanged on Wednesday, but declared in its statement that downside risks to the economy and the labour market had diminished since last autumn.But Bernanke’s comments on asset purchases prompted an immediate fall in US stocks and a jump in Treasury yields, moves that ...
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