Last week, as market participants returned full-force after the ABS East conference, the primary market generated a healthy $17 billion of new issuance. The board was populated with a fair mix of deals, including a stranded cost deal, in the robust week, even as the Federal Open Market Committee meeting and a new hurricane loomed.
Heading into the week, the prevailing sentiment was that the FOMC would take a break from its measured pace of increases to the fed-funds rate in order to give the economy a breather after Hurricane Katrina. Fed Chairman Alan Greenspan quashed speculation by raising rates for the eleventh consecutive time by one-quarter point to 3.75%. Also, as the week wore on, Hurricane Rita grew in intensity to a Level 5 storm, and as many on the Texas Gulf coast evacuated, many in the ABS market readied to calculate the impact of the hurricane, even as the impact of Katrina remained far from clear.