Our Friend the TED Spread

The TED spread is the difference in interest rates between the LIBOR rate, which banks use to lend each other money over night, and the 3 month US Treasury bill.

While interest rates go up and down, generally the TED spread is fairly constant....But not now.

It just hit a record high.

It's not that the LIBOR has gone up much, but that so many people want T-Bills right now, because they see nothing else as safe, that they have bid down the interest rates on that instrument.