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☆ Morning Bid: Swinging between bank fears and rate risks
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +5 min

A look at the day ahead in U.S. and global markets from Mike DolanMarkets seem caught between the devil and the deep blue sea. Easing concerns about bank stability this week have merely re-introduced interest rate risk, reining in any suggestion of a runaway relief rally as the first quarter closes on Friday. While nerves persist over March bank failures and contagion fears, central banks are still faced with punchy growth and inflation and will likely switch attention back to cooling that down once they're assured banks can take the strain. But interest rate markets are already correcting as signs of stability in the banking arena emerge. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Bank fears will likely lead to even more market volatility in the week ahead
▼ + stars: | 2023-03-24 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

Market turbulence could reign supreme once again in the week ahead, as investors worry about the potential for more trouble rippling through the banking system. The broader market was initially under pressure Friday as investors became jittery about Deutsche Bank . "The market is saying: 'You, the Fed, do not appreciate the slowdown that is going to hit us,'" Chandler said. "The market is going to do a lot better and it held onto its gains despite all the things that rocked the market. He added that market concern about banks has risen, and there is concern credit tightening will hurt the economy.

"It was a quirky situation," St. Louis Fed President James Bullard said in comments to a St. Louis community group. 'FELT VERY STABLE'The Fed raised interest rates by a quarter of a percentage point on Wednesday, its ninth straight increase. This wasn't a straightforward decision," Atlanta Fed President Raphael Bostic said in an interview with National Public Radio, a U.S. media outlet. But "that's a different issue than the macro policy issue that we were dealing with in terms of interest rates," Bostic said. So the conditions were right to do monetary policy the way we want to do monetary policy."

The influence of Fed rate hikes "is going to hit...That is how it is designed." As of December officials expected the policy rate would rise to around 5.1% by year's end. The experience of 1970s-era central bankers informed not only the extent of the rate increases, with the policy rate rising 4.5 percentage points from near zero as of last March. None of those reforms prevented SVB from funneling its rapidly growing deposits into long-term government bonds that lost value as the Fed raised rates. The Fed has announced a review of its supervision at SVB to see if warning signs were missed.

☆ Long-awaited Fed digital payment system to launch in July
▼ + stars: | 2023-03-15 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

The Federal Reserve's digital payments system, which it promises will help speed up the way money moves around the world, will debut in July. FedNow, as it will be known, will create "a leading-edge payments system that is resilient, adaptive, and accessible," said Richmond Fed President Tom Barkin, who is the program's executive sponsor. Participants will complete a training and certification process in early April, according to a Fed announcement. Institutions that participate in the program will have seven-day, 24-hour access, as opposed to a system currently in place that closes on weekends. Some Fed officials say the program even could supplant the need for a central bank digital currency.

☆ Morning Bid: Breathtaking Powell jolts
▼ + stars: | 2023-03-08 | by ( ) www.reuters.com time to read: +5 min

Rate markets are still scrambling to re-set and even the White House seemed taken aback by what it hoped would not be an overreaction to the surprisingly robust start to the new year. "But we're dealing with one month of data and people need to sit back and take a breath." The frenetic activity saw the measure of implied Treasury market volatility (.MOVE) jump to its highest level this year. Sterling , the Japanese yen , China's yuan and both the Australian and Canadian dollars all hit their lowest levels of 2023. * Bank of Canada policy decision* U.S. Federal Reserve Chair Jerome Powell testifies to House Financial Services Committee.

☆ Stock futures are flat Tuesday night following a selloff fueled by Powell’s comments: Live updates
▼ + stars: | 2023-03-07 | by ( Hakyung Kim | ) www.cnbc.com time to read: +1 min

The action comes after a selloff spurred by Federal Reserve Chairman Jerome Powell's comments indicating interest rates may need to go higher for longer. Dow Jones Industrial Average futures ticked higher by 2 points, or 0.01%. S&P 500 and Nasdaq 100 futures slipped by 0.04% and 0.05%, respectively. The shakeup in markets came after Fed Chair Powell spoke before the Senate Banking, Housing and Urban Affairs Committee. January's job openings and labor turnover data is due, as is the ADP jobs report for February.

☆ Gold eases as traders fret about interest rates
▼ + stars: | 2023-03-06 | by ( ) www.cnbc.com time to read: +2 min

Gold prices ticked lower on Monday as central banks indicated further interest rate hikes to tame stubbornly high inflation, diminishing bullion's appeal as a hedge against price increases. Spot gold was down 0.1% at $1,853.99 per ounce, as of 0305 GMT, after climbing to its highest since Feb. 15 on Friday. Interest rate hikes to contain high inflation discourage investors from placing money in non-yielding assets such as gold. Richmond Fed President Thomas Barkin said on Friday he could see U.S. rates in the 5.5%-5.75% range. Spot silver firmed 0.1% to $21.27 per ounce, platinum slipped 0.3% to $974.36 and palladium was down 0.2% at $1,449.82.

☆ Fed's Barkin says he could see rates at 5.5%-5.75%
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +1 min

PALO ALTO, California, March 3 (Reuters) - Richmond Federal Reserve Bank President Thomas Barkin said on Friday that he could envision a scenario where the central bank pushes the U.S. benchmark policy interest rate to the 5.5%-5.75% range that some in financial markets are now betting it will. Barkin said it's "entirely possible" that inflation cools faster than he expects, which would imply a shallower rate path. "But I think it's entirely possible that it persists, which would require us to do more," he added. By this time next year, Barkin said, he does not expect the Fed to have started any rate cuts. Reporting by Ann Saphir; Editing by Leslie Adler and Alistair BellOur Standards: The Thomson Reuters Trust Principles.

☆ Fed's Barkin says he doesn't see case for a rate pause now
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: 1 min

PALO ALTO, California, March 3 (Reuters) - Richmond Federal Reserve Bank President Thomas Barkin said on Friday that he does not understand the case for pausing interest rates now, although delivering rate increases in smaller increments means that if the Fed does end up going too far it won't have gone much too far. Rates are currently restrictive, meaning that they are slowing the economy, but the Fed still needs to "feel" its way to a level of rates that is high enough to bring inflation back down, Barkin said at the Stanford Institute for Economic Policy Research. Reporting by Ann Saphir; Editing by Leslie AdlerOur Standards: The Thomson Reuters Trust Principles.

☆ Fed's Barkin calls for deliberate rate hikes to fight 'exhausting' inflation
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +2 min

Policymakers have forecast "additional rate increases" and have been clear "we don’t anticipate rate cuts this year," he said. Inflation by the Fed's preferred year-over-year gauge was 5.4% in January, an increase from the 5.3% pace in December. The Fed's target is 2% inflation. Barkin said he is not sure that the strength in spending that bolstered inflation is sustainable. That's putting some upward pressure on inflation, he said, as workers ask for more pay.

☆ Morning Bid: Inflation 'blip' or brave new world?
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +5 min

U.S. Federal Reserve officials wrestled on Thursday with whether recent data showing inflation, jobs and spending all hotter than expected was a flash in the pan. "It could be that progress has stalled, or it is possible that the numbers released last month were a blip," said Fed Governor Christopher Waller. Atlanta Fed President Raphael Bostic urged a "slow and steady" course of policy response. The resilience of stock markets more generally to the week's bond market quake is notable and slightly puzzling - with implied volatility in bonds (.MOVE) climbing sharply while stock market equivalents (.VIX) subside. Two-year U.S. inflation expectations in the Treasury market climbed to 3% from 2% since early last month.

☆ Stock futures tick lower on Thursday night: Live updates
▼ + stars: | 2023-03-02 | by ( Hakyung Kim | ) www.cnbc.com time to read: +2 min

U.S. stock futures inched downward on Thursday night as investors pondered the Federal Reserve's rate-hiking path in light of fresh commentary from central bank speakers. S&P 500 and Nasdaq 100 futures dipped 0.15% and 0.21%, respectively. The S&P 500 is up 0.28%, while the Nasdaq has a 0.60% gain. The road ahead is a tough one for the central bank, regardless of the messaging they're relaying to the public. Investors will also listen for further commentary from central bank officials, including Fed Governor Michelle Bowman and Richmond Fed President Thomas Barkin.

☆ Morning Bid: Irksome inflation won't die down
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +4 min

Friday's latest U.S. inflation surprise was matched in Europe on Tuesday, with French and Spanish headline inflation rates unexpectedly rising again in February - making for an uncomfortable final day of a transformative month for markets. And worryingly, market-based measures of inflation expectations are rising sharply again too. U.S. two-year 'breakeven' inflation rates , taken from inflation-protected Treasury securities, have jumped 80 basis points this month to 2.8% - wiping away the prior assumption that inflation would return to the Fed's 2% target over two years. In Europe, the five year, five-year forward inflation linked swap has jumped 20bps to a 9-month high just under 2.5%. Stock markets steadied after early losses, with U.S. futures only slightly in the red ahead of the open and month end.

☆ Stocks are reversing course as inflation looks sticky with more retail earnings on deck
▼ + stars: | 2023-02-24 | by ( Jesse Pound | ) www.cnbc.com time to read: +5 min

The optimism about inflation and the U.S. economy is quickly waning on Wall Street, and the early 2023 rally for stocks is fading. The market was under pressure again on Friday after a hotter-than-expected reading for personal consumption expenditures, sending rates higher and stocks lower. Economic updates Next week brings a new round of economic indicators to see how the sticky inflation is affecting consumers and business. Other looks at the economy will come through key earnings reports. Speech by Fed Governor Christopher Waller Friday: 9:45 a.m. Markit Services PMI 10:00 a.m. ISM Services PMI 3:00 p.m.

While the Fed settled for a quarter-percentage-point rise, it also said "ongoing increases" would push the policy rate as high as needed. Recent data also showed inflation continuing to slow, though by less than expected. Today's 4.5%-4.75% policy rate is its highest since the eve of the housing crisis in 2007. "I don't see that indicating to me that we're slowing the economy," Fed Governor Michelle Bowman said of recent data, including strong retail sales and job growth. Richmond Fed's Barkin, by contrast, said he took little "signal" from recent data, anticipating inflation would continue falling.

☆ S&P 500 ends down as investors fret about interest rates
▼ + stars: | 2023-02-18 | by ( Noel Randewich | ) www.reuters.com time to read: +4 min

S&P 500 tradingMicrosoft Corp <MFST.O> fell 1.6% and Nvidia (NVDA.O) dipped 2.8%, both weighing on the S&P 500 as the yield on 10-year Treasury notes hit a three-month high. Of the 11 S&P 500 sector indexes, six rose, led by consumer staples (.SPLRCS), up 1.29%, followed by a 1% gain in Utilities (.SPLRCU). For the week, the S&P 500 fell 0.3%, the Dow lost 0.1% and the Nasdaq climbed 0.6%. Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) by a 1.1-to-one ratio. The S&P 500 posted eight new highs and one new low; the Nasdaq recorded 75 new highs and 68 new lows.

☆ Morning Bid: Elusive peaks
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +4 min

Unlike much of last year, the rates market is now inclined to believe the central bank on the direction of travel. And implied year-end rates are as high as 5.12% - almost half a point higher than where the current rate sits. Two-year Treasury yields hit a three-month high at 4.72% on Friday, with 10-year yields at 3-month peaks too - homing in on 4% for the first time since November. So as impressive as this week's stock market resilience had been to the new inflation and rates environment, it appears to be buckling again already. Key developments that may provide direction to U.S. markets later on Friday:* U.S. Jan import and export prices, leading indicator.

☆ US stocks end mixed as Fed officials sound off on inflation fight and path of future rate hikes
▼ + stars: | 2023-02-17 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +3 min

US stocks closed mixed as top Fed officials weighed in on what it will take to rein in inflation. Richmond Fed President Thomas Barkin said he supports raising rates in 25 basis-point increments. Elsewhere, Fed Governor Michelle Bowman said inflation remains "much too high" and that the central bank should continue raising rates. On Thursday, St. Louis Fed President James Bullard said delivering another rate increase will "lock in" easing inflation, while Cleveland Fed President Loretta Mester said she had seen a "compelling economic case" for delivering another half-point hike in the fed funds rate at the previous central bank meeting. For oil, "one major upside risk to prices remains China and its recovery from the transition to living with COVID.

☆ Stock futures slip Thursday night as inflation data, Fed officials' comments worry investors: Live updates
▼ + stars: | 2023-02-16 | by ( Hakyung Kim | ) www.cnbc.com time to read: +2 min

U.S. stock futures slipped on Thursday night after the major averages suffered declines amid concerns of stubbornly high inflation metrics. S&P 500 and Nasdaq 100 futures dipped by 0.3% and 0.4%, respectively. Fed commentary aside, consumers have been a key focal point for investors this week, particularly in light of the latest round of inflation and retail sales data. There are things to be happy about — the labor market is still tight," SoFi's head of investment strategy Liz Young said on CNBC's "Closing Bell: Overtime." Richmond Fed President Tom Barkin will be speaking about the labor market on Friday morning.

☆ Morning Bid: Wings of a Dove
▼ + stars: | 2023-02-14 | by ( ) www.reuters.com time to read: +5 min

U.S. President Joe Biden is expected on Tuesday to name Fed Vice Chair Lael Brainard to a top White House economic policy position, replacing National Economic Council Director Brian Deese. Biden confidant Jared Bernstein is expected to replace Cecilia Rouse as chair of the Council of Economic Advisers. Brainard was seen as a powerful voice cautioning against over-aggressive Fed policy tightening. U.S. stock futures and world equities were higher on Tuesday, U.S. Treasury yields and the dollar were steady to lower. Euro zone economic growth slowed in the last three months of 2022 but avoided a contraction many had predicted for months.

☆ Fed's Barkin says inflation risks still outweigh others
▼ + stars: | 2023-02-14 | by ( ) www.reuters.com time to read: +2 min

"It's about as expected," Barkin said of the report as he cautioned that it will take a while for inflation to get back down near the Fed's 2% goal. By the Fed's preferred measure, inflation is still running at a 5.0% annual rate. "Inflation is normalizing but it's coming down slowly," Barkin said. "I just think there's gonna be a lot more inertia, a lot more persistence to inflation than maybe we'd all want." "If inflation settles, maybe we don't go quite as far but if inflation persists at levels far above our target then maybe we'll have to do more," he said.

The Fed's policy rate is currently in a 4.50%-4.75% target range. By the Fed's preferred measure, inflation is still running at a 5.0% annual rate. Harker last week flagged the prospect of rate cuts in 2024 should inflation continue to ease. However, following the CPI release on Tuesday, traders of interest rate futures now see the Fed raising borrowing costs three more times, bringing the policy rate to the 5.25%-5.50% range by July, if not June. "My own view is that, given the risks, we shouldn't lock in on a peak interest rate or a precise path of rates," she said.

☆ Asia stocks head for second weekly loss as Fed rate worries flare
▼ + stars: | 2023-02-10 | by ( Kevin Buckland | ) www.reuters.com time to read: +3 min

TOKYO, Feb 10 (Reuters) - Asia-Pacific stocks fell on Friday, slumping toward a second weekly loss as investors fretted about the potential for further Federal Reserve tightening and the effect on the U.S. economy. MSCI's broadest index of Asia-Pacific shares (.MIAP00000PUS) sank 0.54% and was on course for a 1% weekly decline, after losing 1.16% in the previous week. "If rates go past that five, five-and-a-quarter percent range that the Fed has previously indicated, markets are definitely not priced for that - absolutely not." The 10-year yield edged down to around 3.67% after bumping around 3.96% mid-week, also the highest since Jan. 6. Brent crude futures fell 28 cents, or 0.3%, to $84.22 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.5%, to $77.71.

☆ Dollar defensive as investors remain cautious ahead of inflation data
▼ + stars: | 2023-02-10 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

SINGAPORE, Feb 10 (Reuters) - The dollar was on the back foot on Friday after an overnight slide as investors tread with caution ahead of U.S. inflation data next week, with worries over an economic slowdown and the pace of the Federal Reserve's rate hikes hitting sentiment. OCBC's currency strategist Christopher Wong said the foreign exchange market is likely to trade sideways on Friday in the absence of key data and Federal Reserve speakers, putting the focus on the inflation data due next week. "The broad picture is the Fed doing policy calibration... but for the near term there is caution given recent Fed speakers and how disinflation trend may be bumpy." With inflation data due next week, focus has been on the litany of other Fed speakers, with Richmond Fed President Thomas Barkin adding to the policy rhetoric. However, Wong cautioned, that if the disinflation trend proves to be entrenched then softness in the dollar will likely resume.

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