Libor (London Interbank Offered Rate) is the interest rate required by large international banks when they are willing to borrow from other large international banks. This is the interest rate involved when commercial banks trade dollars deposited in non-American banks in the London interbank market. Libor is usually used as a benchmark for commercial loans, mortgages and debt issuance. This week, the three-month dollar Libor has crossed the level of 1.5%, hitting a new high since 65438+February 2008, just a few months after the bankruptcy of Lehman Brothers.

3-month USD LIBOR chart (Bloomberg)

Peter Bukva, chief market analyst of Lindsey Group, a research firm, said on Wednesday that we should not confuse the expected impact of the corporate tax rate decline with other factors. 1.5% Libor is obviously not high, but it is based on the upward interest rate of the debt pool. There are 350 trillion dollars of financial assets and loans linked to Libor in the world, and a considerable part of them are dollar-denominated assets. This means that as the Federal Reserve tightens monetary policy and Libor continues to rise, this may form a "headwind" to offset the positive impact of tax cuts on the economy.

After the market manipulation scandal broke out and Libor became synonymous with corruption, regulators have been looking for a substitute for this global benchmark interest rate. At present, the Bank of England and the Financial Conduct Authority have started plans to replace Libor. On October 29th, Sonia/Kloc-0, Governor of the Bank of England, said that we can't rely on Libor for a long time, but the process of replacing Libor will be very complicated and needs the joint efforts of all parties. Due to the withdrawal of commercial banks from Libor, Libor still has the risk of collapse, which may lead to increased concerns about financial stability. We want to make sure that LIBOR collapses in 20265438. In other words, the situation that Libor is still an important reference for many floating interest rate assets will not change.

According to the latest data released on Wednesday, in the week of June 65438+February 1 in the United States, the activity index of MBA fixed mortgage application increased by 4.7% quarter on quarter, and the ARM index of adjustable-rate mortgage decreased by 1% quarter on quarter. This is usually a signal that buyers seek to lock in the loan interest rate level before the loan interest rate rises, even though ARM's interest rate is relatively low. The Federal Reserve will hold a meeting on interest rates in February 12- 13. It is widely expected that the United States will raise interest rates for the third time this year.