Inflation shakes UK, banking on Fed hike | – #Inflation #shakes #banking #Fed #hike
From Mike Dolan USA and an outlook on the day ahead in global markets
Bank A manifestation of calm to choose a lane to the markets and the last one on Thursday USA has made it possible to bet on a rate hike – but you’d be forgiven for doubting any suggestion of the market’s verdict at the moment.
For two weeks USA and Europe bank tensions and failures in the financial sector have forced the Federal Reserve and other major central banks to stabilize financial systems and still have historically high inflation puts him in the unenviable position of having to choose between fighting with
The level of uncertainty — especially during a public draft for Fed officials — has seen wild swings in market interest rates every day for two weeks and the most volatile month for Treasuries (.MOVE) since the banking collapse 15 years ago.
Many of them bank which ultimately sees the Fed’s job as a mess in itself credit though it thought it would speed up its crisis, last month’s shock news of re-accelerating inflation in the UK reminded central bankers that inflation is still far from simmering.
English inflation The surprise, while reflecting some of the price stickiness of the February US figures released earlier in the month and potentially being overshadowed by recent banking events, makes the Bank of England’s policy decision at least as difficult as Thursday.
End 24 hours Without another mine in the banking world during, and after Tuesday’s first consecutive daily gains in almost three weeks in the S&P500 (.SPX), money markets are now focused on pending policy decisions.
Futures markets now see an 85% chance the Fed will raise rates in a quarter of a point – but no further rate hikes are fully priced in for the period, and at least one rate cut by the end of the year remains in the futures range.
Two-year US Treasury yields have stuck to 4% – but now in March 10It has recorded intraday swings of more than 25 basis points every trading day since , and only moved down from a peak above 70 barrels on March 15.
In fact, the Fed meeting could be more muddled than expected, as Fed Chair Powell’s press briefing should address pressing financial stability questions and the Fed’s recent emergency lending against continued quantitative tightening and another rate hike. Moreover, Fed policymakers’ latest quarterly economic forecasts can reveal a wide range of opinions.
U.S. stock futures and euro stocks were mostly flat, with banking news focused on recent assurances from Treasury Secretary Janet Yellen overnight and further steps to shore up the still-middling First Republic Bank ( FRC.N ).
Outside the Fed, the horror in the UK inflation The reading reinforced expectations for another BoE rate hike on Thursday and another move later in the year. Growth prospects this week only 24 hours before it was only seen as 50-50.
If nothing else, it highlights in red ink how completely dependent all central banks are on incoming data evidence of what’s happening in the real economy.
In this regard, Thursday’s news about the first annual decline in US home prices in the last 11 years will not go unnoticed in Washington.
Sterling hit its highest level since early February as the US dollar fell ahead of the Fed meeting.
Elsewhere, the prospect of central banks hesitating on further tightening of credit has excited the more frothy parts of financial markets, with Bitcoin climbing above $28,000 this week for the first time since June and even “meme stocks” like GameStop ( GME.N ) video Game retailers increased by 40% before the call after reporting a surprise profit.
Alphabet (GOOGL.O) in technology Google on Tuesday launched a public release of its Bard chatbot, seeking users and feedback to gain ground on Microsoft Corp ( MSFT.O ) in the fast-moving race for artificial intelligence technology.
Key developments that could guide US markets on Wednesday:
* US Federal Reserve policy decision, press conference and new economic forecasts
* Europe Central Bank President Christine Lagarde, ECB Chief Economist Philip Lane and ECB Executive Board Member Fabio Panetta speak in Frankfurt; Bundesbank chief Joachim Nagel speaks in London; Bank of Finland Governor Olli Rehn speaks in Brussels
* Bank of Canada policy meeting minutes
Reuters Graphics Reuters GraphicsReuters Graphics Reuters GraphicsReuters Graphics Reuters GraphicsReuters Graphics By Mike Dolan Editing by Raissa Kasolowsky [email protected]. Twitter: @reutersMikeD
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2023-03-22 14:38:48
Source – reuters
Translation“24 HOURS”