When looking at the current U.S. financial situation, the yields of corporate bonds with low credit standings have not been reduced yet compared with the level in summer 2007, despite the massive decrease in the policy rate.
Indeed, the most recent reading on real gross domestic product (GDP) in the United States – the one for the second quarter of this year – still has not returned to the level that it had attained before the crisis, and the increases in economic activity over the past two years have been at a rate insufficient to achieve any sustained reduction in the unemployment rate.