Believing that the U.S. Federal Reserve has completed its campaign of interest rate hikes, investors are buying corporate bonds at the fastest clip since July 2020, the Financial Times reported.
Tag: interest rates
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EUROPE’S INTEREST RATES WILL STAY HIGH, CENTRAL BANKS SAY
Top-line inflation in Europe is easing, but central bankers are warning they do not expect to cut interest rates any time soon.
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YOUNGER AMERICANS FALLING DEEPER INTO DEBT; DELINQUENCIES INCREASING
Americans under age 50 were more than $9.5 trillion in debt in this year’s third quarter, compared to about $9.3 trillion in the preceding three months, marking the largest quarterly increase since 2022’s fourth quarter, U.S. Federal Reserve data shows.
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FED NOT READY TO DECLARE VICTORY OVER INFLATION, POWELL SAYS
U.S. inflation is not yet tamed and the U.S. Federal Reserve is more likely to raise interest rates than cut them if any change is needed, Fed chair Jerome Powell said in a 9 November speech to a conference of the International Monetary Fund.
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HIGH INTEREST RATES THREATEN TO SPARK RECESSION
On 23 October, the yield on the 10-year U.S. treasury bond broke up through 5 percent for the first time in 16 years. On 27 October, the average national interest rate on a 30-year, fixed-rate home mortgage topped 8 percent, according to Bankrate. The average credit card interest rate has reached 22 percent, the U.S. Federal Reserve reported.
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INVESTORS BETTING THAT FED WILL NOT RAISE INTEREST RATES
At the last meeting of the U.S. Federal Reserve’s rate-setting Open Market Committee, a majority predicted the central bank would need to hike rates again when it meets at the end of this month.
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HIGHER INTEREST RATES CUT DOWN CONSUMER BORROWING
Americans reduced their outstanding non-revolving debt, such as auto and student loans, by $30.3 billion in August, according to U.S. Federal Reserve data. The figure represents a 9.8-percent reduction over the previous 12 months.
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ECONOMIC UPDATE – MARKET OVERVIEW
In one of our Top Trends for 2023, we warned of a Middle East Meltdown. Since that time, as we have reported extensively and now it is right in front of everyone’s eyes, the Middle East is melting down.
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FED’S INTEREST RATE STRATEGY PUTS LEVERAGED LOANS AT RISK
Many companies with special needs for cash or less-than-perfect credit profiles borrowed when interest rates were low to keep their financial houses in order. Now that the U.S. Federal Reserve has not only raised rates but also has vowed to keep them aloft for as much as another year or more, those companies are increasingly at risk.
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INVESTORS FINALLY BELIEVE FED’S TOUGH STANCE ON RATES
The U.S. Federal Reserve’s message that it will not cut interest rates any time soon has finally convinced investors.