NEW YORK (Reuters) – The recent widening of the spread between the three-month London interbank offered rate (LIBOR) and three-month overnight index swap rate (OIS) would add a total of $16 billion in borrowing costs for businesses and families, J.P. Morgan analysts said on Thursday.
“For the business sector we estimate this extra burden amounts to perhaps around $11 billion annually. For the household sector the figure is around $5 billion,” J.P. Morgan economist Michael Feroli and analyst Teresa Ho wrote in a research note.
The expected rise in debt burden would be “a very minor tightening and not enough to motivate a change to the macroeconomic outlook,” they said.
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