The Fed also lowered the cost of borrowing directly from the Fed itself via the "Discount Window," where banks can pledge assets as collateral and receive loans of cash against them. In the past couple of weeks, those infusions of liquidity have helped ease the logjam in credit markets to a degree, just as it appears that injections of cash into UK-based markets have helped lower the rates for LIBOR to a good degree. Important for all kinds of adjustable rate loans, the yield on one-month LIBOR rose from the low- to the upper-five percent range in a matter of weeks, but has since settled back, which is better news for American ARM holders than they might have otherwise expected.
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