Fed Rate Outlook Looks Just Right for Banks By Hardika Singh
Banks look forward to relief on deposit costs, but have no desire to go back to zero rates. Meanwhile, switching to a job with a lower salary can come with a raise in free time and work-life balance, and investigations add to regulatory headaches for U.S. tech companies. Read on for this news and more.
Top News Fed Rate Outlook Looks Just Right for Banks
When it comes to interest rates, banks need a Goldilocks scenario: Not too hot, not too cold. The Federal Reserve looks set to deliver. Surging interest rates gave banks plenty of headaches, to put it mildly, ranging from a rapid repricing of deposits to a plunge in the value of their longer-term fixed-rate securities. Yet a sharp pivot toward lower rates wouldn't have been great either, putting pressure on interest income from their shorter-term and floating-rate assets.
U.S. Economy They Chose to Take a Pay Cut-and Say They're Happier
When Daisy Almaguer took a $50,000 pay cut, she celebrated with martinis. Americans quit their jobs at relatively high rates during the past few years. Many chose less work for less money. Careers became less central to people's lives and identities during the pandemic, and some say taking a pay cut gave them a raise in other areas, such as time and autonomy over their days. They also pursued work that brought them more fulfillment.
Financial Regulation Roundup Apple, Meta, Google Probed by EU Under New Digital-Competition Law
The European Union has launched investigations into Apple , Meta Platforms and Google parent Alphabet under its sweeping new digital-competition law, adding to the regulatory scrutiny large U.S. tech companies are facing worldwide.
Forward Guidance Tuesday (all times ET)
8:15 a.m.: Bank of Canada's Rogers speaks to Halifax Partnership
8:30 a.m.: U.S. durable goods orders
9 a.m.: S&P CoreLogic Case-Shiller Home Price Index
10 a.m.: The Conference Board's consumer confidence index
3 p.m.: ECB's Lane at Trinity Student Economic Review event at Trinity College Dublin
Wednesday
6 a.m.: European Union business and consumer surveys for March
10:30 a.m.: Dallas Fed energy survey
6 p.m.: Fed's Waller speaks on economic outlook to Economic Club of New York
Research U.S. Treasury Rate Volatility Is Low, Helped by Confidence in Rate-Outlook
U.S. Treasury rate volatility--as measured by the MOVE Index--is very low despite recent guidance from the Federal Reserve that interest rates could stay higher for longer than previously expected, says Morgan Stanley Wealth Management in a note. "More confidence in the rate outlook seems to be underpinning the calm, with equity market sentiment helping as well," it says. "Even though the 10-year Treasury yield was up approximately 50 basis points from its late-December low, rate volatility is down to levels not seen since summer 2021." Investors have been soothed by a belief in better-than-expected growth while looking through recent inflation prints to a continued trend of slowing inflation, it says. - Emese Bartha
Basis Points The most generous thing you can say about pushing interest rates below zero is that it was an idea ahead of its time. The experiment that turned the world of finance upside down ended this past week in Japan without having accomplished much of anything. At times it felt like 12 years in a strange new world-sort of like going south of the South Pole. - Spencer Jakab U.S. mortgage rates are likely to decline later this year, boosting home sales, Pantheon's Oliver Allen says in a note. Monday's February housing sales data was "a bit disappointing, coming after two straight monthly increases," he says. Sales contracted 0.3%, following January's 1.5% increase and consensus of 2.1% expansion. - Paulo Trevisani Feedback Loop
This newsletter is compiled by Hardika Singh in New York.
Send us your tips, suggestions and feedback. Write to:
[hardika.singh@wsj.com]
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
03-26-24 0715ET
