Moody’s attacks Fed action

The Federal Reserve’s October 31 policy statement could exacerbate credit market disruption, rather than augment the supply of credit, according to a report by Moody’s.

Following October 31’s US rate cut and an unexpectedly confident Federal Open Markets Committee policy statement, November 1’s CDX investment-grade credit default swap spread widened by 6.8 points to 67.3 basis points, exceeding its 60.2 point average of the five trading days before the cut. By contrast, when the Fed cut rates by