Players in the yankee market heaved a collective sigh of relief when the fed funds rate was increased. Following a near-record year in 1996 there were just 11 public yankee issues in February and March. The reason they had been waiting for the Federal Open Market Committee move which came at last on March 25.
Not that there was much expectation of the bottom dropping out of the yankee market. “If rates do increase, any effect on the yankee sector will be no different to that experienced by the domestic US bond market,” said Chuck Mounts, head of international banking research at UBS, at the beginning of February.
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