{"id":1206670,"date":"2023-03-22T12:11:26","date_gmt":"2023-03-22T16:11:26","guid":{"rendered":"https:\/\/bugaluu.com\/news\/wall-street-reacts-to-powells-25bps-rate-hike-in-the-middle-of-a-banking-crisis\/1206670\/"},"modified":"2023-03-22T12:11:26","modified_gmt":"2023-03-22T16:11:26","slug":"wall-street-reacts-to-powells-25bps-rate-hike-in-the-middle-of-a-banking-crisis","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/wall-street-reacts-to-powells-25bps-rate-hike-in-the-middle-of-a-banking-crisis\/1206670\/","title":{"rendered":"Wall Street Reacts To Powell’s 25bps Rate Hike In The Middle Of A Banking Crisis"},"content":{"rendered":"

Wall Street Reacts To Powell’s 25bps Rate Hike In The Middle Of A Banking Crisis<\/span><\/p>\n

\n

The Fed decision has may have come and gone but the hot takes from Wall Street experts are just starting. Below we excerpt from some of the more notable reactions to the Fed’s latest 25bps hike.<\/p>\n

Jan Hatzius, chief economist at Goldman:<\/strong><\/p>\n

\n

The FOMC raised the target range for the federal funds rate by 0.25pp to 4.75-5%. The post-meeting statement noted that, while the \u201cbanking system is sound and resilient,\u201d the recent banking stress is likely to \u201cweigh on economic activity, hiring, and inflation.” The FOMC removed the reference to \u201congoing\u201d hikes in the post-meeting statement and noted instead that \u201cadditional policy firming may be appropriate.\u201d The Committee reiterated that it \u201cremains highly attentive to inflation risks.\u201d The median dot in the Summary of Economic Projections shows a funds rate of 5.125% at end-2023, unchanged from the December projections. The median projection in the SEP showed lower GDP growth and somewhat higher core inflation in 2023 and 2024.<\/em><\/p>\n<\/blockquote>\n

Eric Winograd, senior US economist at AllianceBernstein:<\/strong><\/p>\n

\n

\u201cSo far my takeaway is that the committee has left all the hard work for Chair Powell in his press conference. If you just look at the statement and the materials, there isn\u2019t a change to their outlook from a few months ago, so he will have to describe how they are thinking about the banking issues as they relate to the economy.\u201d<\/em><\/p>\n<\/blockquote>\n

Quincy Krosby, chief global strategist for LPL Financial:<\/strong><\/p>\n

\n

\u201cThe statement acknowledged that the backdrop remains uncertain in terms of economic activity that may be constrained as financial conditions tighten. Certainly, the press conference will be more in-depth as reporters seek to ascertain the Fed\u2019s forward trajectory, as the futures market sees another 25 basis point hike in May and the beginning of rate cuts in the summer.\u201d<\/em><\/p>\n<\/blockquote>\n

Peter Boockvar, author of the Boock Report:<\/strong><\/p>\n

\n

\u201cI said this morning that this over-hyped meeting was most likely going to be a non-event and it certainly was. That said, the Powell press conference will certainly be a forum for more notable market moves. We\u2019ll see how he does the financial stability vs price stability dance.\u201d<\/em><\/p>\n<\/blockquote>\n

Ira Jersey, strategist at Bloomberg Intelligence:<\/strong><\/p>\n

\n

\u201cThe 25-bp hike and dovish statement was in line with our expectations. Another hike to a peak policy rate will be highly dependent on bank turmoil not becoming systemic. We note that it is institutions with little to no reserves that have been affected so far. In fact, as deposits have moved from smaller banks to money-center banks, bank reserves have increased by about $200 billion, which has driven bank net interest margins higher even amid an inverted yield curve. The issue is the distribution of those profits — smaller institutions aren\u2019t able to take advantage.\u201d<\/em><\/p>\n<\/blockquote>\n

More from BI\u2019s Jersey:<\/strong><\/p>\n

\n

\u201cFor the rate market, though the shape of the curve may shift abruptly over the next month, we think there may be a bias toward bull steepening going forward. Even if rate cuts don\u2019t materialize as the market currently expects, it will continue to price for such an event for the time being.\u201d<\/em><\/p>\n<\/blockquote>\n

Eddy Vataru, portfolio manager at Osterweis Capital Management:<\/strong><\/p>\n

\n

\u201cMy biggest takeaway from this statement is the change here. The Committee anticipates that some additional policy firming may be appropriate. So I think they\u2019re leaning on tighter conditions, courtesy the bank debacle. They might not hike at all anymore, or at the very least they\u2019ll balance the two. And they\u2019ll explicitly pay attention to financial conditions. They might be done. They\u2019ll pause for a while though until they can\u2019t. We had a good chunk of a hike priced in for next month but I think they might pause now.\u201d<\/em><\/p>\n<\/blockquote>\n

Bloomberg Economics\u2019 US team says:<\/strong><\/p>\n

\n

\u201cThe Fed weighed the pros and cons of a wait-and-see approach against a continuation of hikes, and chose the latter. That signals an unconditional commitment to the price-stability leg of the Fed\u2019s dual mandate. We think they made the right decision.\u201d<\/em><\/p>\n<\/blockquote>\n

Source: Bloomberg, primary sources.<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 03\/22\/2023 – 15:04<\/span><\/p>\n

From:Zerohedge<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Wall Street Reacts To Powell’s 25bps Rate Hike In The Middle Of A Banking Crisis The Fed decision has may have come and gone but…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1206670","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1206670","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1206670"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1206670\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1206670"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1206670"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1206670"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}