Around the Street: Talking Liquidity and the Economy
Money, money everywhere, but no one wants to lend. Global markets continued to feel the effects of a liquidity squeeze, as yield spreads extended to record wide levels and interbank lending slowed to a crawl. The squeeze prompted the Federal Reserve, along with other central banks from Europe and Asia, to step in with a coordinated plan to bolster liquidity on Sept. 18. Also the same day, reports on weekly initial jobless claims and the Philadelphia Federal Reserve Bank's index of economic conditions for September gave some clues about the health of the U.S. economy.
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