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
“Boring” money markets funds are in style with short-term bond yields up, said SoFi’s Liz Young. Yields are in the 5% range as investors see the Fed potentially driving up its key rate higher. Young said if the Fed were to swing back to rate cuts, watch out for falling yields. A year after the … Read more
US inflation has steadily cooled since mid-2022, thanks to large interest-rate increases by the Federal Reserve. However, a four-month drop in the dollar is threatening to derail that trend by raising the cost of imported goods. The dollar index has fallen by more than 11% from a peak reached in late September. US consumers are … Read more