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...inequality increasing savings and lower productivity and growth rates reducing the desire for investment....
...Most of last week I was in Switzerland, at a Bank for International Settlements conference. (Unhedged is now just me, until I find a replacement for the irreplaceable Ethan.)...
...The flipside to higher interest rates is people also want more for their savings....
...It also comes as global central banks, led by the US Federal Reserve, have signalled that interest rates are expected to remain higher for longer as they battle to bring down inflation, a shift that has...
...Now, almost half of all seniors are at risk of a financial shock with less than six weeks of liquid savings....
...But banks are finally having to pass on higher savings rates to depositors, according to JPMorgan and Wells Fargo, which also reported earnings....
...You see the same thing when you look at savings — the amount of money people have in checking and savings accounts across the income distribution. Look at people who make less than $25,000 a year....
...Deposit costs at the largest US banks rose more than interest revenue last quarter for the first time since the Federal Reserve began raising rates two years ago, as savers demanded lenders share the benefits...
...The savings rate of 3.6 per cent in the first quarter was again low, suggesting few worries among households regarding activity levels....
...Banks are unlikely to offer the same high yield on their savings accounts due to costs of intermediation. Direct debt sales to retail investors will therefore suck out funds from bank accounts....
...From the bank: When can we expect sagging S&L tax revenues to moderate consumption and gross investment growth?...
...Federal liquidity (changes in the Fed Balance sheet adjusted for changes in the Treasury general account, the Fed’s reverse repo facility, and the Bank Term Funding Program) has been going sideways for a...
...Growth and employment remain strong — so strong, in fact, that expectations for Federal Reserve interest rate cuts are being pushed further into the future....
...To the surprise of many, Federal Reserve chair Jay Powell struck a decidedly dovish tone in his press conference on Wednesday....
...It is increasingly infiltrating the likes of the Federal Reserve Board, the European Central Bank and the Bank of England. And it is one of the few acronyms for which economists deserve forgiveness....
...England, European Central Bank and the Federal Reserve....
...Here he makes the case that the stock prices in the failure of the bank’s recently announced strategic revamp: Investors value banks on price-to-book value ratios with reference to the return on equity...
...banks....
...Last year the SNB was forced to play a key role in saving Credit Suisse, Switzerland’s second-largest bank, and orchestrating its emergency takeover by rival UBS....
...Banks that failed to keep up have been left exposed. Between spring 2022 and 2023, the US federal funds effective rate soared from almost zero to more than 5 per cent....
...The central bank has held rates steady since July....
...First, the rise of fixed-rate loans — and pandemic savings — have stunted the impact of rate rises....
...Nearly 10 per cent of this balance was in serious delinquency (defined as 90 days or more late), according to the Federal Reserve Bank of New York....
...They have been able to charge more for loans because of the interest rates being increased by the Federal Reserve, but they haven’t been passing on these higher savings rates to depositors at the same rate...
...As you can see at right, bank credit is still restricted, but spreads don’t care....
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