The Fed will likely pause any further hikes in interest-rate as inflation starts to cool down, Moody’s Mark Zandi said. Zandi said he’s confident inflation will drop to the Fed’s 2% target by May next year. The ongoing stress in the banking system and recession risks are also factors that might convince the Fed to … Read more
AI is in a “baby bubble” for now, Bank of America said Friday. What could burst the bubble is the Fed pausing rate hikes and then restarting the cycle. BofA said the dot-com blow-up in the early 2000s had roots in the Fed restarting policy tightening in 1999. Artificial intelligence is this year’s investment craze … Read more
Investors can’t stop piling up cash, with assets in money market funds ballooning to a record $5.3 trillion. The surge in cash comes amid a combo of high interest rates and depressed investor sentiment towards the stock market. But that massive pile of cash could be the fuel needed to drive the next bull market … Read more
The Fed will finally cut interest rates in the fall, former PIMCO economist Paul McCulley predicted. That’s because banking turmoil will put credit in a “tight vise,” slowing the economy, he warned. Economists have flagged the risk of recession over the past year as the Fed aggressively hiked rates. Despite what Jerome Powell and the … Read more
Equities and other risk assets will take a hit when central banks withdraw as much as $800 billion of stimulus deployed to prop up the global economy, according to Citigroup Inc. The risk rally has been fueled by the injection of over $1 trillion of central bank liquidity, and high-frequency liquidity indicators suggest this is … Read more
India Ratings & Research (Ind-Ra) said Tuesday, benefits to companies owing to lower interest rates and a reduction in debt are likely to be reversed in the current fiscal year. According to the report, the move will take place because of a sharp rise in interest rates and higher working capital financing needs. Ind-Ra expects … Read more
Treasury Secretary Janet Yellen said the situation around US banks was “stabilizing,” though regulators stood ready to repeat the extraordinary actions taken in March to contain depositor runs. “My read is the outflows from smaller and medium-sized banks are diminishing and matters are stabilizing, but it’s a situation we’re watching very closely,” Yellen told reporters … Read more
Over $286 billion has made its way into money market funds in March, The FT reported. “We are seeing shifts into money market funds by every segment of investor,” Goldman Sachs said. Bank deposit outflows have risen to $17.5 trillion, and have notched $5.4 trillion at smaller banks. Depositors’ search for a safe haven has … Read more
Goldman Sachs analysts have revised their prediction for the upcoming U.S. Federal Reserve meeting, stating that they no longer anticipate a rate hike on March 22. This shift in prediction is due to the recent stress experienced in the banking sector, which has led to considerable uncertainty about the future rate hike path beyond March. … Read more