Wall Street Journal (September 16)
“The Federal Reserve raised interest rates Wednesday for the first time in three years, a sharp reversal that began taking back cuts it made last year.” The decision to “raise the benchmark federal-funds rate range by a quarter point to between 3.75% and 4%” was unanimous and most “officials penciled in one more hike this year in interest-rate projections released after their meeting.”
Tags: 3.75%, Benchmark, Decision, Fed, Federal-funds rate, Hike, Interest rates, Projections, Quarter-point, Raise, Reversal, Unanimous
Barron’s (September 14)
“AI stocks aren’t alone when it comes to being sensitive to interest rates; equities in general tend to be reactive” and they also averse to the “potential chilling effect on demand” of higher rates. Though expectations are that “the Fed will raise rates when the FOMC announces its monetary policy decision,” the resilience of the economy this year provides “a hopeful thought for anyone dreading a rate hike.”
Tags: AI, Averse, Chilling effect, Demand, Dreading, Economy, Equities, Expectations, Fed, FOMC, Hike, Interest rates, Monetary policy, Reactive, Resilience, Sensitive, Stocks
Reuters (September 11)
“Analysts at JPMorgan now expect eight of the nine developed-market central banks to hike interest rates by the year end, including the Fed, BOJ, all four central banks in Europe, and the reserve banks of Australia and New Zealand.”
Tags: Analysts, Australia, BOJ, Central banks, Developed market, Europe, Fed, Hike, Interest rates, JPMorgan, Reserve banks, Year end
Institutional Investor (September 3)
“After years of low interest rates, which masked managers’ mistakes in underwriting and risk-taking, the current economic environment is exposing a huge gap in origination quality and covenant discipline among managers. But allocators aren’t panicked: More than half see the current challenges as cyclical rather than structural, with 62 percent expecting private credit to emerge stronger. In addition, 75.5 percent of allocators agree that periods of market stress are the best times to reassess managers and renegotiate terms for the future.”
Tags: Allocators, Covenant discipline, Cyclical, Economic environment, Exposing, Gap, Interest rates, Managers, Market stress, Origination quality, Private credit, Renegotiate, Risk-taking, Structural, Underwriting
The Economist (August 29)
“The background music of Donald Trump’s second term has been the sound of norms breaking. On economic policy alone, the president has used tariffs to usurp Congress’s taxing powers and launched attack after attack on the independence of the Federal Reserve, which he accuses of keeping interest rates too high.” While it may be “tempting to tune the noise out,” the Treasury’s recent intervention in bond markets “deserves to echo far and wide.” And “so long as government debt stays high,” more of these unconventional Treasury follies will probably ensue, but America will ultimately come to “regret Scott Bessent’s bond-market misadventures.”
Tags: Attack, Background, Bessent, Bond markets, Congress, Debt, Economic policy, Federal Reserve, Government, Independence, Interest rates, Intervention, Misadventures, Noise, Norms breaking, Regret, Tariffs, Taxing powers, Treasury, Trump, Unconventional, Usurp
New York Times (August 27)
“Propping up the yen. Buying back U.S. debt. Americans might wonder: What is the Treasury Department doing? Over the past month, it has made some unusual moves to tamp down an alarming surge in interest rates. The global history of maneuvers like these suggests that they rarely work on their own — and can often be worse than doing nothing.”
Tags: Alarming, Buying, History, Interest rates, Maneuvers, Propping up, Surge, Tamp down, Treasury, U.S. debt, Unusual, Worse, Yen
Motley Fool (August 2)
“While earnings season has been a mixed bag, with investors punishing companies spending exorbitantly on their artificial intelligence data center build-outs, it was the Federal Open Market Committee’s (FOMC) decision to leave interest rates unchanged that roiled the iconic Dow Jones Industrial Average, benchmark S&P 500, and technology-powered Nasdaq Composite. The Dow’s greater-than 1,100-point loss on July 29 was its worst single-day performance in over a year.”
Tags: AI, Companies, Dow, Earnings season, FOMC, Interest rates, Investors, Mixed bag, Nasdaq Composite, Punishing, Roiled, S&P 500, Spending. Data center build-outs
Bloomberg (July 6)
“Donald Trump’s war against Iran may be over, but the repercussions for global monetary policy are here to stay.” In particular, “the path for central bank interest rates around the world has now shifted higher for years to come.” Forecasts for borrowing costs calculated by Bloomberg Economics (BE) “show trajectories elevated by as much as half a percentage point or more through 2028 compared with those envisaged before the war. That’s both on BE’s global gauge for rates, and its measure for advanced economies.”
Tags: 2028, Bloomberg Economics, Borrowing costs, Central bank, Elevated, Forecasts, Global, Higher, Interest rates, Iran, Monetary policy, Repercussions, Trump, War
Barron’s (May 27)
“Stocks are near their all-time highs.” Moreover, “investors are nervous about the numerous risks that could hit stocks and the economy. High oil prices and persistent inflation fears. The possibility that this will push the Federal Reserve to raise interest rates. Worries about artificial-intelligence disrupting software and other sectors.” Nevertheless, Goldman Sachs believes equities “are still good investments” because “rapidly rising earnings could keep pushing up stock prices” and, rather than dumping equities, investors can manage risk in other ways.
Tags: AI, All-time highs, Earnings, Economy, Equities, Fears, Fed, Goldman Sachs, Inflation, Interest rates, Investors, Nervous, Numerous, Oil prices, Stock prices, Stocks
The Times (May 27)
“Corporate leaders who think decades ahead in business become incredibly short-sighted in advocacy, financing ideas that become roadblocks to innovation and growth.” Big Tech is currently finding out about the phenomena that Milton Friedman dubbed “the suicidal impulse of the business community.” For years, Big Tech “helped fund climate activism,” but they now face “backlash as AI data centres drive demand for energy and infrastructure growth.”
Tags: AI, All-time highs, Earnings, Economy, Equities, Fears, Fed, Goldman Sachs, Inflation, Interest rates, Investors, Nervous, Numerous, Oil prices, Risk, Stock prices, Stocks
