@theMarket: The Fed Walks a Tightrope.By Bill Schmick,
04:15PM / Friday, March 24, 2023 | |
In the face of uncertainty over the fate of regional banks, the U.S. central bank hiked interest rates and said they would continue with their program of quantitative tightening.
Stocks fell and bonds rose after the FOMC meeting on Wednesday, however, the real drama was elsewhere. U.S. Treasury Secretary Janet Yellen was testifying before a Senate Appropriations subcommittee at the same time as the Fed meeting. She told lawmakers that she has not considered or discussed "blanket insurance" for U.S. banking deposits without approval by Congress.
Many traders in the markets had just assumed that since the government had made all depositors whole in 0 Comments
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@theMarket: Financial Contagion Spooks MarketsBy Bill Schmick,
04:04PM / Friday, March 17, 2023 | |
The global banking sector took center stage as three U.S. banks bit the dust and a fourth large bank in Europe floundered. This puts the Fed between a rock and a hard place.
The Federal Open Market Committee meets this coming Wednesday and, before the collapse of the Silicon Valley Bank, was expected to raise interest rates by 25 to 50 basis points. Today, expectations are split between no rate hikes at all, and maybe one more hike of 25 basis points and then a pause.
Investors large and small held their breath last weekend in the wake of three bank failures. Fears of financial contagion swept the country throughout the week. Regulators acted on several 0 Comments
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@theMarket: Banks Hammer the MarketsBy Bill Schmick,
04:05PM / Friday, March 10, 2023 | |
Stocks fell this week as investors turned more bearish. You can blame Fed Chairman Jerome Powell for that as well as troubles in the banking sector.
"Higher for Longer" may be finally sinking in. Powell's two-day testimony in front of the House and the Senate this week was decidedly hawkish. In retrospect, there was nothing new in his statements, but for some reason the financial markets were willing to listen. Congress heard his message as well: inflation is still a problem, the jobs market needs to weaken, and if higher interest rates mean a recession, then so be it.
Those who had been confident that the Fed would raise the Fed funds rate by 0 Comments
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@theMarket: Bond Yields Weighing on StocksBy Bill Schmick,
03:11PM / Friday, February 24, 2023 | |
There is a discrepancy growing between bond and stock markets. The bond vigilantes are betting the Fed is nowhere near done hiking rates. Stock jockeys disagree. Which camp will prove correct?
A look at the government's U.S. Treasury bond auctions this week resulted in most yields going higher. Buyers insisted on higher returns to purchase the billions of dollars in U.S. Treasury notes, bills, and bonds that are a weekly occurrence in the financial markets.
Overall sentiment in the markets has turned cautious and, for some, downright bearish once again after the January rally in stocks. Recession fears are once again taking center stage for many although 0 Comments
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@theMarket: Stocks Working Off Some SteamBy Bill Schmick,
03:59PM / Friday, February 17, 2023 | |
It has been a week of consolidation. A string of downside negative surprises has kept the markets in check but has failed to break anything. Given the macroeconomic data, that has been impressive.
Both the monthly Consumer Price Index (CPI) and the Producer Price Index (PPI) came in hotter than expected. The monthly CPI rose 0.5 percent, and the PPI came in at 0.7 percent. That spooked investors since higher inflation means the Fed will likely keep interest rates higher for longer. Yet, dip buyers took advantage of the declines and bid markets back up.
In addition, retail sales for January were almost double the average estimate, coming in at a 3 percent 0 Comments
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