Hints and tips:
...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....
...Blerina Uruçi, chief US economist at T Rowe Price, said she was worried about higher energy prices leading to higher costs elsewhere....
...Further deposit flight and the rise in yields could in turn push banks to offer higher interest rates on savings accounts, which could be particularly costly for smaller lenders....
...And the savings cushion built in Covid may be further depleted....
...Now, it’s easy to understand why interest rates matter on financial products like savings accounts....
...Traders had hoped the US Federal Reserve would take a softer approach to rate rises, but concerns that the central bank will step up its fight against inflation have shattered the calm....
...Write to the FintechFT team at imani.moise@ft.com and sid.v@ft.com....
...Central banks including the US Federal Reserve and the Bank of England have signalled a willingness to tighten monetary policy faster than originally anticipated, but rises in interest rates are still likely...
...This is leading the US Federal Reserve and the Bank of England towards tapering Covid-19 stimulus and has emboldened the hawkish voices on the European Central Bank’s Governing Council calling for ending...
...A sector of the US finance industry that looks after $4tn of savings for individuals and businesses has come under severe strain as US markets flirt with negative interest rates....
...However, the challenge is that the recovery will be rapid, and progress towards its goals will come sooner than the central bank expects....
...The findings echo analysis from the Bank of England last week, which calculated Britons had saved an extra £180bn in their bank accounts during the crisis, or almost 10 per cent of the UK’s annual gross...
...Federal Reserve chair Jay Powell warned that the pandemic still had the capacity to derail the country’s economic comeback....
...The EU drug regulator is also to launch an investigation next week into whether clinical trials of Russia’s Sputnik V Covid-19 vaccine contravened ethical and scientific standards....
...The Central Bank of Nigeria is attempting to temper the euphoria with warnings that inexperienced investors could lose their meagre savings....
...going to have a V-shaped recovery”....
...Savings are a necessary cushion, especially in the US, where more jobs have been wiped out....
...The quickest path to make sure that banks keep credit lines open, runs through the Federal Reserve....
...Casting doubt on the merits of a V-shaped recovery is hardly an earth-shattering view....
...Beyond rate cuts, Asian central banks have done more to ease liquidity shocks, from Bank Indonesia buying government bonds to the Bank of Thailand creating a corporate bond fund....
...purchases of corporate bonds — at least so far in the case of the US Federal Reserve — explains in part wider credit risk premiums....
...At the same time, the Federal Reserve has unleashed measures — including slashing interest rates, asset purchases, expanded lending facilities and swap lines with foreign central banks — that outstripped...
...Savings are expected to be greater than £100m vs. previous guidance of c£100m....
...My own feeling is that this will not be a V or even a U-shaped recovery, but a downwardly trending W that has a high risk of turning into a L....
...Rotork has the single largest exposure in our coverage (~50% v 60% in 2014 though)....
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