The Federal Reserve will begin reducing its holdings of Treasury and agency mortgage securities in October. Reduction will start at $10 billion per month, gradually rising to a maximum of $30 billion. The Fed is keeping the door open for a December interest rate hike.
Loan market activity remained steady this week as business continued to pick up after the U.S. Labor Day holiday. The S&P/LSTA Leveraged Loan Index gained 0.04%, while the average bid for the asset class slipped three bps, to 97.92.
The U.K.’s Financial Conduct Authority (FCA) has recently set the market abuzz with its announcement that it will no longer require banks to submit quotes for LIBOR rates in sterling by the end of 2021. The FCA also recommended that the market stop using LIBOR as a benchmark.
Voya Senior Loan Group Co-Heads Jeff Bakalar and Dan Norman establish a framework of “what’s what” to help investors understand this development, including what is known at this point and the potential implications for the senior loan and CLO markets.