Financial markets are easing. The spread between the 1-month New York Funding Rate and the Overnight Index Swap Rate went down to 1%. It is in the downwards trend and should go to normal 0.5%.
All the efforts by the central banks are having an effect and lending should be heading towards more or less normal conditions. The Fed's move in buying preferential shares in financial institutions should also work in that direction.
On the other hand, in the real economy, the conditions are deteriorating fast. The unemployment is on the rise, but nothing spectacular yet. Consumer sentiment is falling, as well as investors'. Fortunately, the surprise on the upside, one day, should be the same as on the downside. If analysts could have foreseen this crisis, it would have never been here.
All the efforts by the central banks are having an effect and lending should be heading towards more or less normal conditions. The Fed's move in buying preferential shares in financial institutions should also work in that direction.
On the other hand, in the real economy, the conditions are deteriorating fast. The unemployment is on the rise, but nothing spectacular yet. Consumer sentiment is falling, as well as investors'. Fortunately, the surprise on the upside, one day, should be the same as on the downside. If analysts could have foreseen this crisis, it would have never been here.
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