https://sputnikglobe.com/20230322/markets-brace-themselves-for-feds-looming-interest-rate-move-1108679038.html
Markets Brace Themselves for Fed's Looming Interest Rate Move
Markets Brace Themselves for Fed's Looming Interest Rate Move
Sputnik International
Economists stress that the Federal Reserve has found itself between a rock and a hard place, since it needs to increase interest rates to combat inflation while trying to steer clear of escalating the banking crisis.
2023-03-22T12:29+0000
2023-03-22T12:29+0000
2023-03-22T12:30+0000
economy
us federal reserve
silicon valley bank collapse
us
rate hike
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Investors are waiting for another rate hike to be announced by the US Federal Reserve. Consensus forecasts compiled by Trading Economics and business media predict a 25 basis point rate hike at the Fed meeting. Market data shows that traders envision an 83% chance of such a move.At the same time, many economists, including representatives of the leading Wall Street banks, have withdrawn their rate hike forecasts and now believe that the Fed will take a break in March and will not change the cost of borrowing.What is more important is that the Fed needs to calm financial markets rattled by the Silicon Valley Bank collapse and UBS’s takeover of troubled Swiss rival Credit Suisse, experts added.However, analysts are skeptical about this sort of psychotherapy for financial markets. Jim Bianco – head of Bianco Research - hints on Twitter that he doubts Fed officials have the ability to calm investors down.The collapse of Silicon Valley Bank (SVB) on March 10, followed by the Signature and Silvergate bank failures, along with the crisis engulfing Credit Suisse in Europe, has prompted other banking sector stocks to tank. Lately, it has become evident that SVB's management awaited the imminent fiasco. Shortly before the crash, the bank issued insider loans for a record amount of more than $219 million, American media reported. This was a final shot at somehow profiting off a troubled financial institution.
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markets, financial markets, silicon valley bank collapse, rate hike. fed, federal reserve, banking crisis
markets, financial markets, silicon valley bank collapse, rate hike. fed, federal reserve, banking crisis
Markets Brace Themselves for Fed's Looming Interest Rate Move
12:29 GMT 22.03.2023 (Updated: 12:30 GMT 22.03.2023) Economists stress that the Federal Reserve has found itself between a rock and a hard place, since it needs to increase interest rates to combat inflation while trying to steer clear of escalating the banking crisis.
Investors are waiting for another rate hike to be announced by the US Federal Reserve. Consensus forecasts compiled by Trading Economics and business media predict a 25 basis point rate hike at the Fed meeting. Market data shows that traders envision an 83% chance of such a move.
At the same time, many economists, including representatives of the leading Wall Street banks, have withdrawn their rate hike forecasts and now believe that the Fed will take a break in March and will not change the cost of borrowing.
What is more important is that the Fed needs to calm financial markets rattled by the Silicon Valley Bank collapse and UBS’s takeover of troubled Swiss rival Credit Suisse, experts added.
However, analysts are skeptical about this sort of psychotherapy for financial markets. Jim Bianco – head of Bianco Research - hints on Twitter that he doubts Fed officials have the ability to calm investors down.
“...They want to “fool you” (aka “project calm”) into believing things are OK. Is this really their plan? When has it worked before? (hint, never), ” he wrote.
The collapse of Silicon Valley Bank (SVB) on March 10, followed by the Signature and Silvergate bank failures, along with the crisis engulfing Credit Suisse in Europe, has prompted other banking sector
stocks to tank. Lately, it has become evident that SVB's management awaited the imminent fiasco. Shortly before the crash, the bank issued insider loans for a record amount of more than $219 million, American media reported. This was a final shot at somehow profiting off a troubled financial institution.
