How Zero Percent Floors Impact Hedge Programs
On Sunday afternoon, the Federal Open Market Committee (FOMC) reduced its target rate by 100bps to a range of 0-0.25%.
On Sunday afternoon, the Federal Open Market Committee (FOMC) reduced its target rate by 100bps to a range of 0-0.25%.
On March 3, 2020, the Federal Open Market Committee (FOMC) made an emergency 50bp interest rate cut in response to the Coronavirus’ impact on the U.S. economy.
LIBOR is being phased out through 2021, and the Secured Overnight Financing Rate (SOFR) was selected as the preferred LIBOR replacement by the Alternative Reference Rates Committee (ARRC) in June 2017.
Rates & Recession: What Happened? Last Wednesday, The Fed lowered its target for the federal funds rate by a quarter percentage point, to a range of 1.75% to 2%.
As the London Inter-bank Offered Rate (LIBOR) begins to phase out, many corporate treasurers have been flooded by a wave of uncertainty. Our advice has been to proactively start planning alternatives by looking out for the guidance and term structures released by accounting regulatory bodies.