• World
  • Business
  • Technology
  • Finance
  • Entertainment
  • Sports
  • World
  • Business
  • Technology
  • Finance
  • Entertainment
  • Sports
No Result
View All Result
US Sharks
No Result
View All Result
Home Finance

US banking concerns widen and interest rates climb again, plus other economy stories you need to read this week

James Hill by James Hill
March 12, 2024
in Finance
0
US banking concerns widen and interest rates climb again, plus other economy stories you need to read this week

FILE PHOTO: U.S. Senator Elizabeth Warren (D-MA) gestures as Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing on the "Semiannual Monetary Policy Report to the Congress", on Capitol Hill in Washington, D.C., U.S., June 22, 2022. REUTERS/Elizabeth Frantz/File Photo

74
SHARES
1.2k
VIEWS
Share on FacebookShare on Twitter

1. US banking concerns widen as regulators seize First Republic

US regulators seized First Republic Bank and sold its assets to JPMorgan Chase this week, in a deal to resolve the largest US bank failure since the 2008 financial crisis. The move is an attempt to draw a line under a lingering period of banking turmoil that began with the collapse of US lenders Silicon Valley Bank and Signature Bank in March.

First Republic was among the regional US lenders most impacted by the resulting crisis in confidence in the banking sector, as depositors fled from smaller banks to giants like JPMorgan. It had limped along since then, but investors fled again last week when it disclosed more than $100 billion in outflows in the first quarter

US banking concerns widen and interest rates climb again, plus other economy stories you need to read this week

Attention has since turned to Los Angeles-based bank PacWest Bancorp, whose share price has slumped after it said it has entered talks with potential partners and investors about strategic options. This reignited market fears of a worsening banking crisis and dragged down the share prices of other regional lenders.

There are “increasing concerns that the banking crisis could take another turn for the worse … as worries swirl about deposit flight and the lack of asset diversification among smaller lenders,” Susannah Streeter, Head of Money and Markets at financial services company Hargreaves Lansdown, told Reuters.

US President Joe Biden has hailed the First Republic deal for protecting depositors without making taxpayers foot the bill. But he has also repeated his call for stronger regulation and supervision of large and regional banks.

The news comes alongside a new Gallup survey that found nearly 50% of American adults are concerned about the security of the money they keep in banks.

2. More interest rate rises by US and ECB – but is the end in sight?

The US Federal Reserve and European Central Bank (ECB) both raised interest rates by a quarter of a percentage point this week. But while the US is signalling this may be the last in a historic series of rate rises, the ECB says further increases are likely.

The US central bank lifted its benchmark overnight interest rate to 5.00-5.25% – its highest level in 16 years – but in doing so it dropped language from its policy statement saying that it “anticipates” further rate increases. The change doesn’t stop the bank’s policy-setting committee from hiking rates again. However, Fed Chair Jerome Powell says it is now an open question whether further increases will be warranted in an economy still facing high inflation but also showing signs of a slowdown – and with risks of a tough credit crackdown by banks on the horizon.

Fed hikes rates to levels last seen before financial crisis
US interest rates are at their highest level in 16 years.
Image: Reuters

The ECB has raised interest rates to 3.25%, as expected, and says further action is still likely given mounting wage and price pressures. The hike is a slowdown after three consecutive 50 basis-point increases, but the bank has still lifted rates by a combined 375 basis points since last July – its fastest-ever pace of tightening.

The latest rise comes days after Eurozone banking data showed the biggest drop in loan demand in over a decade, suggesting that previous rate rises are working their way through the economy and that ECB policies are now restricting growth.

Policymakers had been split in the run-up to the meeting over a 25 basis-point and a 50 basis-point rise. But the case for a smaller move was supported by the facts that the Eurozone economy barely grew last quarter and that banks are tightening access to credit, raising the risk of a credit crunch. Underlying inflation has also stopped rising – at least for the time being.

Most big central banks around the world are now moving in 25-basis-point increments after big hikes earlier. Several banks in the Middle East followed the Fed and raised interest rates by 25 basis points this week, as did Hong Kong’s Monetary Authority.

US banking concerns widen and interest rates climb again, plus other economy stories you need to read this week

3. News in brief: Stories on the economy from around the world

The International Monetary Fund (IMF) has raised its economic forecast for Asia, saying that China’s recovery will underpin growth. However, it also flagged potential risks from persistent inflation and global market volatility driven by Western banking-sector woes.

The IMF has also warned of “uncertainty” around the direction of Japan’s monetary policy, saying a possible shift away from ultra-low interest rates could have a significant impact on global financial markets. The Bank of Japan last week announced a broad review of its monetary policy and removed a pledge to keep interest rates at “current or lower levels”.

The risk of a US debt default is looming larger, with the government potentially running short of funds to pay its bills as early as 1 June, Treasury Secretary Janet Yellen says. The government’s current debt ceiling is set at $31.4 trillion, and a political standoff is preventing it from being raised. A US debt default would be unprecedented and would shake the global economy.

The conflict in Sudan has dealt a crippling blow to the country’s economy, as well as disrupting internal trade routes, threatening imports and triggering a cash crunch. Factories, banks, shops and markets have been looted or damaged, power and water supplies have been failing, and residents have reported steep price rises and shortages of basic goods.

South Korea’s annual consumer price inflation eased for a third consecutive month to a 14-month low of 3.7% in April. The central bank expects the downward trend to persist for some time, supporting the market’s view that its policy-tightening cycle is over.

Australia’s central bank stunned markets this week by raising its cash rate by 25 basis points, saying that inflation is way too high and that even further tightening may be needed as a result. An extended pause in rate rises had been expected. The cash rate now sits at 3.85%, its highest since early 2012.

German services sector activity grew at its fastest pace in a year in April. The HCOB services Purchasing Managers’ Index (PMI) rose to 56.0, from 53.7 in March. Demand and new orders have increased for three consecutive months, with significant growth in exports.

Pakistan’s inflation rate rose to a record 36.4% in the year to April, driven mainly by food prices. This is the highest rate in South Asia and is up from 35.4% in March.

The World Bank’s board of governors has elected former Mastercard CEO Ajay Banga to a five-year term as president. The Indian-born finance and development expert will be tasked with revamping the lender to tackle climate change and other global crises.

4. More on finance and the economy on Agenda

As the world faces deep economic uncertainty and a disrupted jobs outlook, what does the term “growth” actually mean? Leaders and experts at the World Economic Forum’s Growth Summit 2023 outlined what inclusive, sustainable and resilient growth means to them and their communities.

More than a quarter of all venture capital funding went into climate technology in 2022, according to PwC. But there is regional disparity and much of this funding is focused on the US and Europe, the Forum’s Growth Summit 2023 heard in discussions about how to fund a faster green transition.

Economic uncertainty means companies need to prepare for a range of possibilities, says consulting firm Bain. From stress-testing to strengthening balance sheets, here are some actions businesses should be considering.

Tags: plus other economy stories you need to read this weekUS banking concerns widen and interest rates climb again
James Hill

James Hill

Related Posts

Jannik Sinner Net Worth 2025
Finance

Jannik Sinner Net Worth 2025

June 8, 2025
Discovering the Beauty of Cathédrale Notre-Dame de Paris with The Lego Group
Finance

Discovering the Beauty of Cathédrale Notre-Dame de Paris with The Lego Group

March 12, 2024
Understanding Revenue in the Online Casino Industry for 2023
Finance

Understanding Revenue in the Online Casino Industry for 2023

March 12, 2024
Next Post
Hitting 'reset' on the US recession countdown: Morning Brief

Hitting 'reset' on the US recession countdown: Morning Brief

How does Tadej Pogacar beat Jonas Vingegaard to Tour de France crown? Attack from the start

How does Tadej Pogacar beat Jonas Vingegaard to Tour de France crown? Attack from the start

Scotland National Cricket Team: Origin, ICC Membership, Players List, Ranking

Scotland National Cricket Team: Origin, ICC Membership, Players List, Ranking

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

Serena Williams publicizes her retirement from tennis

Serena Williams publicizes her retirement from tennis

3 years ago
Premier League gamers will restrict taking a knee earlier than matches, league declares forward of recent season

Premier League gamers will restrict taking a knee earlier than matches, league declares forward of recent season

3 years ago
The ultimate guide for scuba in Andaman

The ultimate guide for scuba in Andaman

3 years ago
Elon Musk challenges Twitter CEO Parag Agrawal to a debate on bots

Elon Musk challenges Twitter CEO Parag Agrawal to a debate on bots

3 years ago

Categories

  • Business
  • Entertainment
  • Finance
  • Sports
  • Technology
  • World

Topics

Alberta's Power Landscape Andy Cole Antares Reach Grant Program Asher Laub Boolean Logic Illustrates Morgan Christie's Personal Experiences and Society's Shortcomings Bride of Chucky Costume Champagne Color Conquering the Australian Open with Tennis Maestro Dino Prižmić Dead Hendrix Dead Hendrix and Yungcudii Decoding the Formulas of Johnson & Johnson and Procter & Gamble Delta Air Lines • Earnings • NYSE:DAL • Ed Bastian Dmitry Bivol vs. Gilberto Zurdo Ramirez Evonne Perfect Exploring the Synergy of Technology and Innovation in the Heart of San Diego Fiddlers Dream Productions Games Done Quick: Speedrunning for a Cause Grifols Plasma Donor Hub Harnessing the Winds Down Under Hawaii Rainbow Warriors Men's Volleyball Illithid in Dungeons & Dragons 5e Is Dan Levy Gay? Jason Momoa and Johnny Depp Kansas City Chiefs Kroy Biermann Net Worth 2023 Leonardo DiCaprio Net Worth 2024 Megacon 2024 Mercedes Hoyos Monmouth Cardiology Mustang Natural Gas Generators NFL Betting Extravaganza Nick Mullens Nicolas Cantu Nuclear Power: Illuminating the Path to Sustainable Energy Path Tracing: Revolutionizing Visuals in Call of Duty 4: Modern Warfare Protist Unveiled Rolex Deep Sea Rope Lights • Christmas Lights • Light-emitting diode Taylor Swift Transocean: Navigating the Waves of NYSE - A Deep Dive into NYSE Travis Kelce Westlake Dermatology Yule Log Dreamlight Valley Yungcudii
No Result
View All Result

Highlights

Jamie Dimon: The Titan of Wall Street

Disney Layoffs: What’s Really Happening Behind the Magic Curtain?

Dr. Sreenath Agnihotri: A Beacon of Healing and Green Revolution — A Nobel-Worthy Contribution from India

Is Gordon Ramsay Bald? The Truth Behind the Hair of a Celebrity Chef

Understanding the Medicaid Bill: A Complete Guide

Kyle Snyder: The Unstoppable Force in American Wrestling

Trending

Jannik Sinner Net Worth 2025
Finance

Jannik Sinner Net Worth 2025

by Isabella
June 8, 2025
0

Introduction Let’s talk about one of the most exciting names in tennis right now—Jannik Sinner. If you’ve...

The Ultimate Guide to Straws: From Sip to Sustainability

The Ultimate Guide to Straws: From Sip to Sustainability

June 8, 2025
Jared Leto Cult – The Truth Behind the Myth

Jared Leto Cult – The Truth Behind the Myth

June 8, 2025
Jamie Dimon: The Titan of Wall Street

Jamie Dimon: The Titan of Wall Street

June 2, 2025
Disney Layoffs: What’s Really Happening Behind the Magic Curtain?

Disney Layoffs: What’s Really Happening Behind the Magic Curtain?

June 2, 2025

We bring you the best Premium WordPress Themes that perfect for news, magazine, personal blog, etc.

Follow us on social media:

Recent News

  • Jannik Sinner Net Worth 2025
  • The Ultimate Guide to Straws: From Sip to Sustainability
  • Jared Leto Cult – The Truth Behind the Myth

Category

  • Business
  • Entertainment
  • Finance
  • Sports
  • Technology
  • World
  • About Us
  • Contact Us
  • Disclaimer
  • Privacy Policy
  • Terms & Conditions
  • Remove News
  • Sponsored & Guest Post

All Rights Reserved © 2022. US Sharks

No Result
View All Result
  • About Us
  • Contact Us
  • Disclaimer
  • Privacy Policy
  • Terms & Conditions
  • Remove News
  • Sponsored & Guest Post

All Rights Reserved © 2022. US Sharks

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?