Commercial Paper Market Contracts Most in Two Years

Outstanding commercial paper plunged $42.5 billion in latest week.

The market for corporate borrowing through commercial paper contracted by the most in more than two years as U.S. money-market funds reduce purchases of the short-term IOUs.

The seasonally adjusted amount of U.S. commercial paper plunged $42.5 billion to $1.02 trillion outstanding in the week ended yesterday, the sixth decrease in seven weeks, the Federal Reserve said today on its website. The decline was the biggest since the week ended Dec. 1, 2010 when the market fell $44.3 billion, and the lowest level outstanding since Nov. 21.

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