Is Increasing Libor Rate a Reason for Concern?

The video discusses the recent increase in the London Interbank Offering Rate (Libor) due to money fund reform. It explains the impact of these reforms on credit markets, particularly the supply-demand mismatch for CPCD. The video also explores market reactions, potential future trends in Libor, and investment strategies in corporate credit, highlighting the opportunities in short-term corporate debt and long-term treasuries.

What is the primary reason for the recent increase in Libor?

• Worsening bank credit

• Government intervention in markets

• Increased demand for CP/CD

• Money fund reform

What is the expected impact of the October 14th regulations on Libor?

• Libor will become irrelevant

• Libor may continue to rise

• Libor will remain unchanged

• Libor will decrease significantly

How might investors respond to the changes in Libor and CPCD demand?

• Invest heavily in prime funds

• Shift investments to government bonds

• Monitor the market for further outflows

• Avoid all forms of corporate credit

What is the current state of investment-grade issuance in the corporate credit market?

• It has reached about $1 trillion

• It is not affected by Libor changes

• It is stagnant

• It is declining rapidly

What strategy is suggested for managing risk and yield in the current market?

• Focus solely on short-term corporate debt

• Invest only in long-term treasuries

• Avoid all investments until the market stabilizes

• Balance short-term corporate debt with long-term treasuries