Home ›› 31 Mar 2023 ›› Stock
Asian and European markets mostly rose Thursday following a recent run-up, with banking sector worries easing and traders weighing central banks’ interest rate plans in the wake of recent turmoil.
Investors have taken heart from reassurances by authorities around the world that the fallout from the collapse of US regional banks and the takeover of Credit Suisse was contained.
But the flare-up has also fanned speculation the Federal Reserve will have to end its inflation-fighting rate hike campaign sooner than expected in order to avoid further destabilising the finance industry.
That has even led to bets on officials cutting borrowing costs by the end of the year -- some forecasts put the rate at just above four per cent by 2024, compared with more than five prior to the recent upheaval. That has focused eyes on the Fed’s next policy meeting, with observers predicting that could mark the last increase, even though inflation is still much higher than its target.
“The Fed remains in a very difficult position,” said Wolfe Research’s Chris Senyek. “With banks stabilising, inflation still way above target, the labour market still historically strong, and the Fed desperately needing to rebuild credibility, our sense is that the (policy board) will hike by 25 basis points on May 3.”