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38 sats \ 4 replies \ @Bell_curve 21 Aug \ parent \ on: Donald Trump Does Not Know the "Correct" Interest Rate econ
Is Libor determined by market or political forces?
Treasury yields are set by daily or weekly treasury auctions. What interest rate will you lend to US govt?
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40 sats \ 2 replies \ @Bell_curve 21 Aug
I forgot Libor disappeared and was replaced by:
https://www.investopedia.com/secured-overnight-financing-rate-sofr-4683954
SOFR is based on transactions in the Treasury repurchase market and is preferable to LIBOR since it is based on data from observable transactions rather than estimated future borrowing rates.
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21 sats \ 1 reply \ @Undisciplined OP 21 Aug
Wasn't there some scandal surrounding Libor back during the Great Recession?
I suppose I could look it up, but I probably won't.
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0 sats \ 0 replies \ @Bell_curve 22 Aug
2007 and 2008 and 2022 IIRC
Libor is 'scandalous' because sometimes their rates differ from the Federal Funds rate.
edit: https://www.investopedia.com/terms/l/libor.asp#toc-libor-rate-rigging-scandal
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21 sats \ 0 replies \ @Undisciplined OP 21 Aug
I think Libor is political, but I'd have to double check.
I would not lend to the US government, so I'm the wrong person to ask. My preference would be that nobody lend to them.
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