Bernanke cautiously upbeat on liquidity

Ben Bernanke, the chairman of the Federal Reserve, signalled on Tuesday that he believed liquidity conditions in the US were slowly returning to normal.

Conditions in the Treasury repo market had, he said, improved substantially since mid-March. Spreads on agency mortgage-backed loans, and between conforming fixed-rate mortgage rates and Treasury rates had also improved since two months ago. Spreads between term-dollar London Interbank Offered Rates (Libor) - a common measure of money market

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