Latest Headlines

The stubborn inflation the Fed can't shake

Core PCE inflation ran at 4.6 per cent year-on-year in May, and Federal Reserve officials can think of little else.

China's lending engine sputters

The People's Bank of China cut its one-year loan prime rate by ten basis points, to 3.55 per cent, and very little happened.

Why company defaults are creeping up

Company defaults are rising, but by an unfamiliar route.

Britain's mortgage crunch returns

Two-year gilt yields have risen above five per cent because UK core inflation will not come down, and mortgage rates have followed them to levels last seen in the global financial crisis.

What the Fed's forecasts really say

The Federal Reserve held its benchmark rate in June but raised the median projection for where rates will peak to 5.6 per cent.

The Fed wants to pause without looking soft

Headline inflation has slowed to 4.0 per cent year-on-year, which gives the Federal Reserve a reasonable case for pausing its rate increases at the June meeting.

A bull market built on seven stocks

The S&P 500 has risen twenty per cent from its October low, which by the market's arbitrary convention makes this a bull market.

The Treasury refills its account, and markets pay

The US Treasury is rebuilding its operating balance towards $600 billion, after running the Treasury General Account down to almost nothing to avoid breaching the debt ceiling.

The jobs report that disagrees with itself, again

Non-farm payrolls rose by 339,000 in May, well above a consensus that had expected a gentle slowdown.

The debt deal that changes almost nothing

The 27 May agreement suspends the federal debt ceiling through 2025, and its authors have hailed it as a triumph of bipartisan restraint.

Memorial Day: The debt deal is done. Now comes the bill

Negotiators agreed on 27 May to suspend the debt ceiling, and Washington's political drama ended in its usual anticlimax.

Nvidia's forecast stuns Wall Street

Nvidia told investors on 24 May to expect second-quarter revenue of $11.0 billion, 53 per cent above the consensus forecast of $7.15 billion.

Get ready for a flood of Treasury bills

Negotiators in Washington are edging towards a last-minute deal that would suspend the debt ceiling until 2025, and money markets are preparing for the hangover.

Nobody can agree how much savings Americans have left

The Federal Reserve Bank of San Francisco reckons that about $500 billion of the $2.1 trillion in excess pandemic savings is left, and that it will be spent by late summer.

Why core inflation stopped falling

Headline consumer prices rose 4.9 per cent in the year to April, the first reading below 5 per cent in two years.

Office towers face a $1.5trn refinancing problem

About $1.5 trillion of commercial real estate debt matures before the end of 2025, according to Morgan Stanley, and office loans are the hardest part of it to refinance.

When does America run out of money?

Janet Yellen told congressional leaders that the federal government could run out of cash "as early as 1 June", turning the debt-ceiling standoff into an immediate problem for the plumbing of the financial system.

Why regional banks lost a third of their value

The KBW Regional Banking Index (KRE) has fallen by more than 35 per cent since Silicon Valley Bank failed on 8 March.

Is this the Fed's last hike?

The Federal Deposit Insurance Corporation seized First Republic Bank in the early hours of 1 May and sold most of its assets and deposits to JPMorgan Chase straight away.

First Republic's final quarter: $100bn walks out the door

First Republic Bank lost $102 billion of deposits in the first quarter, according to the earnings report it finally published on 24 April.

Markets start pricing an American default

The spread on one-year US sovereign credit default swaps (CDS) rose past 100 basis points in late April.

Tighter loans today, more defaults tomorrow

A net 45 per cent of American banks were tightening credit in the Federal Reserve's January Senior Loan Officer Opinion Survey (SLOOS), and that was before the March banking panic.

Tax Day: What April's tax cheques say about the debt ceiling

Millions of Americans filed their federal income tax returns by 18 April, and money market desks on Wall Street spent the day doing sums of their own.

China is spending again. Its property market isn't

China's economy grew at a respectable 4.5 per cent annual pace in the first quarter, lifted by a sharp rebound in retail spending, restaurants and domestic travel after the end of zero-Covid.

The real cost of the banking crisis: customers want interest

JPMorgan Chase opened the first-quarter bank earnings season with record net revenue of $38.3 billion and a 52 per cent jump in net income.

The Treasury bills nobody wants to hold

Treasury bills maturing in April and May yield about 4.0 per cent.

Watching deposits leave in real time

March payrolls rose by a healthy 236,000, but the Federal Reserve's weekly H.8 release showed deposits still pouring out of small and mid-sized banks.

OPEC just made the Fed's job harder

OPEC+ surprised oil markets on Sunday, 2 April, by announcing a production cut of 1.16 million barrels per day.

First Republic has been rescued. It hasn't been saved

Eleven of America's largest banks deposited $30 billion of uninsured cash in First Republic Bank on 16 March, in a deal put together by JPMorgan Chase and Treasury Secretary Janet Yellen.

Savers flee banks for money funds

Assets in US money market funds (MMFs) rose past $5.1 trillion in March 2023, a record, after taking in more than $300 billion in a few weeks.

Why Credit Suisse bondholders lost everything before shareholders

Are bank failures doing the Fed's job for it?

Emergency Fed lending to banks is approaching $300 billion, according to the central bank's H.4.1 release, and that has undone months of quantitative tightening in a matter of days.

The Fed's quiet bailout of banks' bad bond bets

Banks borrowed a record $152.9 billion from the Federal Reserve's discount window, according to the H.4.1 balance-sheet release published on Thursday, 16 March.

After SVB, the biggest bond rally since 1987

How a bank run happens at the speed of an app

Depositors tried to pull $42 billion out of Silicon Valley Bank (SVB) in less than ten hours on Thursday, 9 March, more than a quarter of its deposits.

Powell signals bigger hikes are back

Jerome Powell told the Senate Banking Committee that the Federal Reserve is ready to go back to rate rises of 50 basis points if the economic data stay hot.

America's banks are sitting on $620bn of hidden losses

America's commercial banks are sitting on roughly $620 billion of unrealised losses on their securities portfolios, according to recent figures from the Federal Deposit Insurance Corporation (FDIC).

Could rates really hit 6%?

A few weeks ago, anyone who suggested the Federal Reserve might take the federal funds rate toward 6.0 per cent would have been written off as a scaremonger.

When the data changes after the decision

Core personal consumption expenditures (PCE) prices rose 0.6 per cent in January, lifting the annual rate to 4.7 per cent and giving policymakers at the Eccles Building a nasty surprise.

Did shoppers really spend 3% more in January?

US retail sales jumped 3.0 per cent in January from December, ending talk of an imminent consumer slump and sending economists back to their growth models.

Private credit's borrowers are feeling the squeeze

The Secured Overnight Financing Rate (SOFR) now resets above 4.55 per cent, up from almost nothing a year ago, and private credit funds are paying their limited partners double-digit gross yields.

Valentine's Day: Markets still love rate cuts. The Fed doesn't love them back

January's consumer prices rose at a 6.4 per cent annual pace, the Bureau of Labor Statistics said on Valentine's Day, and markets' eighteen-month infatuation with Federal Reserve rate cuts was once again shown to be one-sided.

Short-term bonds are having a terrible month

February 2023 has been a rotten month for short-dated government debt.

Super Bowl: $7m for 30 seconds, and what it says about confidence

Thirty seconds of advertising during Super Bowl LVII, between the Philadelphia Eagles and the Kansas City Chiefs, cost a record $7 million.

Last year's inflation just got rewritten

On 10 February the Bureau of Labor Statistics published its routine annual seasonal revisions to the consumer price index, and in doing so rewrote the inflation record for late 2022.

517,000 jobs and the end of the rate-cut dream

The Bureau of Labor Statistics reported 517,000 net new payroll jobs for January, and the unemployment rate fell to 3.4 per cent, its lowest since May 1969.

Meta's new growth story: buying back its own shares

Meta Platforms reported bland fourth-quarter revenue and a lacklustre outlook, and its shares rose 23 per cent in a day, adding roughly $90 billion of market value in a few hours.

How the Treasury is quietly pumping cash into markets

Federal Reserve officials have spent the winter telling conferences that quantitative tightening (QT) is running at its full cap of $95 billion a month.

The economy grew 2.9%. Demand barely grew at all

The advance estimate put fourth-quarter US GDP growth at 2.9 per cent annualised, comfortably ahead of forecasts, and commentators were quick to praise the economy's resilience.

America hits its debt limit again. The countdown starts

The United States hit its $31.4 trillion statutory borrowing limit on 19 January, and Treasury Secretary Janet Yellen began the "extraordinary measures" that keep the government paying its bills.