Minutes from the Fed’s December meeting show officials had discussed shrinking the Fed’s overall asset holdings, and raising interest rates sooner
Another barometer of US Federal Reserve hawkishness is making a bigger appearance on investors’ dashboards: quantitative tightening.
“There’s a real risk that the Fed is being too aggressive here,” said Scott Kimball, co-head of US fixed income at BMO Global Asset Management, who reduced his positions in high yield corporate bonds and private debt late in 2021, believing they would underperform as rates rise. Higher yields tend to weigh on some stocks, particularly growth names, because they threaten to erode the value of future earnings.
Some analysts had anticipated the move. Analysts at TD said in a research note that they are short 10-year real rates as the market begins to price in balance sheet runoff, saying the current rate of nearly -1% was inconsistent with higher Fed rates and a shrinking balance sheet. However, analysts at Citi said the accelerated timeline of balance-sheet runoff could see curve-steepening over the medium-term “as the balance-sheet vs rate hike pace debate stirs”.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Prince Andrew asks to dismiss US sex case, judge to rule 'soon'
Read more »
Prince Andrew wants US judge to dismiss sex abuse caseA New York court is expected to assess a 2009 settlement deal between Jeffrey Epstein and accuser Virginia Giuffre
Read more »
Fauci: 'focus on Covid hospitalisations not case numbers' as US cases exceed 1 million'One of the things we hope for is that this thing will peak after a period of a few weeks and turn around,' Fauci said.
Read more »
Parliament fire arson case postponedParliament fire arson case postponed - Hawks not ruling out the possibility of more suspects being arrested as the investigation continues
Read more »