Daniel Fuss: My Favorite Indicator

I am watching the condition of the money markets most carefully because they can change so quickly.

I look at the interest rates on eurodollars, Treasury bills, and particularly on commercial paper. [Commercial paper is unsecured debt issued by banks and other companies to finance their short-term credit needs.] A year ago, the commercial paper market was hardly open to anyone. Although commercial paper is primarily used by financial firms, the breadth and depth of that market is extremely important. The commercial paper markets will be the first place to look [to see] if interest rates are going up.

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