Tag: interest rates

Large investors are warning that fears that interest rates in major economies will remain relatively high are growing, threatening to sound a painful alarm in financial markets. Global stock markets remain near record highs and demand for debt issued by the riskiest companies is strong as traders focus on expectations of a summer rate cut. But asset managers and economists now expect only minimal monetary easing, especially as the U.S. Federal Reserve faces unexpectedly persistent inflation.

Asian stocks were mixed on Wednesday as markets renewed expectations that U.S. interest rates could remain high for some time. Fed Chief Executive Jerome Powell said at an event on Tuesday that the central bank has been waiting to cut its key interest rate, which is at its highest level since 2001, because it first needs more confidence that inflation will continue to fall to its 2% target. "The appetite for risk-taking remains weak, with Fed chief Jerome Powell confirming a later rate cut timetable as a series of Fed spokesmen called for more patience on the easing side of the equation," said IG market analyst Yeap Jun Rong.

Stocks are expected to rebound broadly from the sharp sell-off as investors digest the industry merit of U.S. banks and other heavyweights.

Asian stocks slumped on Tuesday, following Wall Street's plunge, after rising yields in the U.S. bond market put pressure on equities. In the oil market, a barrel of U.S. crude for May delivery fell 10 cents to $85.31 a barrel in electronic trading on the New York Mercantile Exchange.

Goldman Sachs said Monday that its first-quarter profit rose by double digits, buoyed by the general performance of the stock and bond markets in the first few months of the year. Goldman Sachs has struggled through much of 2023, as higher interest rates have prevented the firm from making deals and acquisitions. The New York-based investment bank reported a profit of $4.13 billion, up 28% from a year earlier.

Inflation in March showed an annualized CPI of 3.51 TP3T, the highest in six months, but people are still debating whether this will deal a blow to the argument that inflation is falling. Yes, prices are still high, but the rate of increase is declining - even counting March's headline number. Common sense tells us that the Fed is still on track to lower rates later this year - as soon as possible, but probably not as soon as previously hoped. The real key is