U.S. Dollar Libor Spread Versus Euribor Approaches Record

The spread between unsecured lending rates in the U.S. and Europe is approaching a level not seen since the dot-com crash that kicked off the millennium. “We don’t believe this divergence in monetary policies is sustainable, but the spread is unlikely to narrow due to the ECB raising rates,” said Crescat Capital global macro analyst Tavi Costa. “Policy changes from similar extremes is what preceded the last two recessions.”