Congress has passed the $700 billion U.S. rescue package, just four days after voting down the original version.
Now all eyes have turned to the market’s reaction. Will this free up North America’s lock-tight credit markets? Who knows. It may take a while for the U.S. treasury to buy up all the rotten assets plaguing American banks. In the short-term, it’s possible that lenders may still be unwilling to loosen up credit to any great extent.
On one positive note, CEP says LIBOR (the international overnight bank-to-bank lending rate) has improved dramatically.
Here is the rest of the market’s reaction following this historic vote:
Dow Jones Industrials: +0.45%
5-year Canadian bond yield: -0.07% to 2.96%
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