The Fed help government to reduce deficits with its main liquidity sources
The Fed’s main liquidity sources are bank reserves and reverse repo facility inflows, which allow the Fed to store cash on its books. As of Wednesday, bank reserves were $3.3 trillion, down $1 trillion from 2021. Reverse repo daily outstanding fell from about $2 trillion between June 2022 and June this year to $1.5 trillion.…
The Fed losses $100 billion due to raised interest rates
The Federal Reserve (Fed) has reported losses exceeding $100 billion, with experts predicting a $200 billion “peak” loss by 2025. The Fed records its losses in a deferred asset, which includes future payments before delivering earnings to the Treasury. The Fed has not surprised by the loss, as it has been pushing to raise interest…
US Junk-rated bonds and loans are halved over 2023
US bad debt-rated corporations are issuing billions of dollars of short-term debt this year, causing a significant expense to their profits and interest coverage ratios. The research shows that junk-rated bonds and loans due in 2024 have nearly halved over 2023 by $70 billion, and the entire debt load due by 2025 is down about…
Gold prices increased due to FED holding rates
Gold and copper prices increased in Asian trade on Friday due to investors betting on the Federal Reserve’s ability to hold rates despite rising inflation. The dollar rallied to six-month highs on Thursday, limiting gold’s gains. Spot gold jumped 0.3% to $1,916.80, while December gold futures rose 0.3% to $1,938.35. The Fed is expected to…
China’s economy’s recovery followed by increased oil prices
Saudi Arabian production cuts and optimism about the Chinese economy’s recovery have led to a third weekly increase in oil prices. Brent futures rose 8 cents to $93.78, while WTI rose 14 cents to $90.3. The increase is driven by supply fears and the slow recovery of the US and European Central Banks. Oil refinery…
The Capital Economics predicts more rate hikes coming on Russia’s this years
Russia’s central bank has lowered its rate to 7.5% this year after sending troops to Ukraine and imposing sanctions. The bank raised its year-end inflation projection to 6.0-7.0%, citing inflationary risks from a tight labor market, strong consumer demand, and Moscow’s budget deficit. Capital Economics doubts inflation will reach the bank’s 4% target in 2024…
Russia’s central banks raises its interest rate to 13%
The Russian central bank raised its key interest rate by 100 basis points to 13%, raising borrowing costs for the third time due to a weak rouble and inflationary pressures. The bank issued a hawkish warning, stating it would consider further rate hikes and that inflationary risks remained high. The rouble was 0.5% stronger against…
Biden’s campaign plans to rural voters
Maine’s top rural development officer, Rhiannon Hampson, highlights the significant funding for infrastructure projects in the past year, including the Ticonic Bridge replacement and Presque Isle airport enhancements. Biden’s 2024 reelection depends on crediting economic gains, which is harder in rural areas due to frustrations among older, whiter voters. Biden’s campaign will target rural voters,…