GE Commercial Finance
Current Dynamics
Fixed U.S. swap rate movement has been volatile so far in July amid lower oil prices and continued volatility in the major U.S. stock indices.                                                                                                     
  • On July 24, 1 and 3-month U.S. Libor set at 2.46000% and 2.79500% respectively, nearly unchanged from the end of June.  Last month, 1 and 3-month Libor averaged 2.47% and 2.77%.
  • On July 15, Fed Chairman Bernanke said "FOMC participants viewed the inflation outlook as unusually uncertain."
  • Recent U.S. data releases showed that in June, consumer confidence fell further, more jobs were lost, retail sales were disappointing and inflation rose further.  In May, existing home sales rose slightly while new home sales fell.  For Q1, real GDP rose an anemic 1.0%.
U.S. Forecast - July 23
Consensus forecasts anticipate sluggish U.S. economic growth for the balance of 2008.
Fed Policy - June 25
In June, the FOMC kept its fed funds target rate steady at 2.00% and expressed concerns over economic weakness, tight credit conditions and higher inflation.
LIBOR's Path - May 22
One and 3-month U.S. Libor have declined since the FOMC cut the target funds rate on April 30 to 2.00%.  Three-month Libor remains uncomfortably high relative to fed funds.