The Fed raises interest rates to 0.25%
The Federal Reserve raised its benchmark interest rate target range by 0.25%, leaving room for additional hikes this year. The fed funds rate rose to 5.25%-5.50%, the highest level since March 2001. Future rate hikes will depend on the economy and financial markets. The process of lowering inflation to 2% has a long way to…
US card company hope on china tourism growth
Visa and Mastercard, which rely on China to boost travel spending, experienced a poor first half of the year due to China’s economy losing momentum post-COVID-19. Both card companies reported China travel levels below pre-pandemic levels, with inward cross-border travel to China being 50% of 2019 levels and outbound nearly 70%. China’s economic recovery has…
Higher capital requirements will have consequences, says Bank of America’s CEO.
Bank of America CEO Brian Moynihan advises caution in implementing Basel III’s capital standards to maintain global competitiveness. He believes the playing field is level and that restrictions should be carefully administered to prevent the US from being less competitive. U.S. banking authorities will propose tighter bank capital requirements for banks with $100 billion or…
A Proposal of new regulators for US banks
Before the plan’s unveiling, banks and Republican members of Congress expressed similar worries, indicating a long and difficult road to enacting the huge change. Regulators will accept comments through November 30 and apply the new guidelines by mid-2028. The proposed rule would implement a 2017 Basel Committee on Banking Supervision agreement to change how banks…
Jerome Powell said regulator have a “difficult balance”
A trio of U.S. bank regulators proposed raising capital by 16% to change how banks calculate risk and how much capital they must retain as a cushion. The Fed, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency decided to release the over 1000-page proposal for public comment, which the banking industry…
US banks need billion of capital to defend against risk
U.S. authorities want big banks to set aside billions more in risk capital. The Fed, FDIC, and OCC released the idea for public comment, which the banking industry lambasted. Such a large increase could require them to eliminate services, raise fees, or both. Fed Chair Jerome Powell supports the proposals but quickly outlined significant concerns.…
China Debt to GDP Ratio reach ATH
China’s debt-to-GDP ratio reached a record in the second quarter, with total debt rising to 281.5% of GDP. This suggests China is not facing a “balance sheet recession,” but reduced borrowing growth will hamper GDP growth. The macro-leverage ratio rose to 283.9% in the second quarter, but household debt is rising at half the rate…
Dollar Slips as Rates hike on FOMC decision
The Federal Reserve’s 22-year rate hike and data-dependent additional raises may be the last of the cycle, but investors believe it’s done and cut bets on more this year. The European Central Bank’s 25-basis-point rate hike may be its last this cycle. Stock market bulls are encouraged by rising US and European rates and a…