To keep it in perspective, Baa rated debt differentials to 10-year Treasuries are still below 2016 levels, despite their ferocious spike in the past few days.
The Ted spread, or the difference between three-month Libor and three-month U.S. T-bills, is still well below its 2018 high. The gap is a widely-used indicator of the risk markets perceive in the global banking system.
Some economists see a key test of looming at the end of the financial quarter this month.
“That’s when companies need to refinance, they need show cash on balance sheet, to prove they really have funding,” Marc Ostwald, chief economist and global strategist at ADM Investor Services International in London, said in an interview. “That’s when it all becomes much more serious.”
--With assistance from Liz Capo McCormick.
This article was provided by Bloomberg News.