Capital Markets

Supply of Commercial Paper Unfolds Again

Slowly but steadily, amount outstanding increases — to $1.60 trillion.
Stephen TaubNovember 6, 2008

The commercial paper market continued its slow-but-steady improvement, increasing by $50.5 billion to a seasonally adjusted $1.60 trillion outstanding in the week ended Wednesday.

This is the second consecutive weekly increase, as reported by the Federal Reserve, and attained the same level that prevailed five weeks ago. However, the total still is down from $1.82 trillion eight weeks ago, and the peak of $2.2 trillion during the summer of 2007, according to the Associated Press.

Financial paper accounted for virtually all the increase in the past week.

Earlier this week, we pointed out that rates on the highest-ranked 30-day commercial paper fell 0.27 of a percentage point, to 1.74 percent, the lowest since Sept. 22, 2004. That Bloomberg News report also cited yields on 90-day paper that fell 0.06 of a point, to a three-month low of 2.62 percent.

Further this week, the Fed set the 90-day commercial paper rate at 2.6 percent, down 0.01 of a percentage point, under its new Commercial Paper Funding Facility (CPFF).