Lunes 13/03/22 Semana de la inflación

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LAST CHG %CHG
DJIA 31863.63 -46.01 -0.14
S&P 500 3860.41 -1.18 -0.03
Nasdaq Composite 11205.49 66.60 0.60
Japan: Nikkei 225 27832.96 -311.01 -1.11
UK: FTSE 100 7548.63 -199.72 -2.58
Crude Oil Futures 74.98 -1.70 -2.22
Gold Futures 1911.90 44.70 2.39
Yen 133.11 -1.89 -1.40
Euro 1.0736

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LAST CHG %CHG
DJIA 31833.64 -76.00 -0.24
S&P 500 3863.32 1.73 0.04
Nasdaq Composite 11211.92 73.03 0.66
Japan: Nikkei 225 27832.96 -311.01 -1.11
UK: FTSE 100 7548.63 -199.72 -2.58
Crude Oil Futures 74.46 -2.22 -2.90
Gold Futures 1913.50 46.30 2.48
Yen 133.41 -1.59 -1.18
Euro 1.0726 0

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LAST CHG %CHG
DJIA 31819.14 -90.50 -0.28
S&P 500 3855.76 -5.83 -0.15
Nasdaq Composite 11188.84 49.96 0.45
Japan: Nikkei 225 27832.96 -311.01 -1.11
UK: FTSE 100 7548.63 -199.72 -2.58
Crude Oil Futures 74.69 -1.99 -2.60
Gold Futures 1918.90 51.70 2.77
Yen 133.24

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Something broke, but the Fed is still expected to go through with rate hikes
PUBLISHED MON, MAR 13 20231:58 PM EDTUPDATED 34 MIN AGO
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Jeff Cox
@JEFF.COX.7528
@JEFFCOXCNBCCOM
Markets still expect the Fed to keep up its inflation-fighting efforts, despite high-profile bank failures that have rattled the financial system.
Traders on Monday assigned an 85% probability of a 0.25 percentage point interest rate increase when the Federal Open Market Committee meets March 21-22.
Goldman Sachs was virtually alone when it said it expects the central bank to pass up the chance to hike rates next week.
Federal Reserve Chairman Jerome Powell testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing titled The Semiannual Monetary Policy Report to the Congress, in Hart Building on Tuesday, March 7, 2023.
Federal Reserve Chairman Jerome Powell testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing titled The Semiannual Monetary Policy Report to the Congress, in Hart Building on Tuesday, March 7, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
When the Federal Reserve starts to raise interest rates, it generally keeps doing so until something breaks, or so goes the collective Wall Street wisdom.

So with the second- and third-largest bank failures ever in the books happening just over the past few days, and worries of more to come, that would seem to qualify as significant breakage and reason for the central bank to back off.


Not so fast.

Even with the failure over the past several days of Silicon Valley Bank and Signature Bank that forced regulators to spring into action, markets still expect the Fed to keep up its inflation-fighting efforts. Surging bond yields played into the demise of SVB in particular as the bank faced some $16 billion in unrealized losses from held-to-maturity Treasurys that had lost principal value due to higher rates.

Still, the dramatic events may not even technically qualify as something breaking in the collective Wall Street mind.

“No, it doesn’t,” said Quincy Krosby, chief global strategist at LPL Financial. “Is this enough to qualify as the kind of break that would have the Fed pivot? The market overall doesn’t think so.”

While market pricing was volatile Monday, the bias was toward a Fed that would continue tightening monetary policy. Traders assigned an 85% probability of a 0.25 percentage point interest rate increase when the Federal Open Market Committee meets March 21-22 in Washington, D.C., according to a CME Group estimate. For a brief period last week, markets were expecting a 0.50-point move, following remarks from Fed Chair Jerome Powell indicating the central bank was concerned about recent hot inflation data.


Pondering a pivot

Goldman Sachs on Monday said it does not expect the Fed to hike rates at all this month, though there were few, if any, other Wall Street forecasters who shared that view. Both Bank of America and Citigroup said they expect the Fed to make the quarter-point move, likely followed by a few more.

Moreover, even though Goldman said it figures the Fed will skip a hike in March, it still is looking for quarter-point increases in May, June and July.

“We think Fed officials are likely to prioritize financial stability for now, viewing it as the immediate problem and high inflation as a medium-term problem,” Goldman told clients in a note.

Krosby said the Fed is at least likely to discuss the idea of holding off on an increase.

Next week’s meeting is a big one in that the FOMC not only will make a decision on rates but also will update its projections for the future, including its outlook for GDP, unemployment and inflation.

“Undoubtedly, they’re discussing it. The question is, will they be worried perhaps that that nurtures fear?” she said. “They should telegraph [before the meeting] to the market that they’re going to pause, or that they’re going to continue fighting inflation. This is all up for discussion.”

Managing the message

Citigroup economist Andrew Hollenhorst said pausing — a term Fed officials generally dislike — now would send the wrong message to the market.

The Fed has sought to burnish its credentials as an inflation fighter after it spent months disavowing rising prices as nothing more than a “transitory” effect from the early days of the Covid pandemic. Powell repeatedly has said the Fed will stay the course until it makes significant progress in getting inflation down to its 2% target.

Citi, in fact, sees the Fed continuing to raise its benchmark funds rate to a target range of 5.5%-5.75%, compared to the current 4.5%-4.75% and well above the market pricing of 4.75%-5%.

“Fed officials are unlikely to pivot at next week’s meeting by pausing rate hikes, in our view,” Hollenhorst said in a client note. “Doing so would invite markets and the public to assume that the Fed’s inflation fighting resolve is only in place up to the point when there is any bumpiness in financial markets or the real economy.”

Bank of America said it remains “watchful” for any signs that the current banking crisis is spreading, a condition that could change the forecast.

“If the Fed is successful at corralling the recent market volatility and ringfencing the traditional banking sector, then it should be able to continue its gradual pace of rate hikes until monetary policy is sufficiently restrictive,” Michael Gapen, BofA’s chief U.S. economist, told clients. “Our outlook for monetary policy is always data dependent; at present it is also dependent on stresses in financial markets.”

Powell also has emphasized the importance of using data to determine the direction in which he wants to steer policy.

The Fed will get its final look at inflation metrics this week when the Labor Department releases its February consumer price index on Tuesday and the producer price counterpart on Wednesday. A New York Fed survey released Monday showed that one-year inflation expectations plummeted during the month.

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Dow cae por quinto día a pesar del respaldo de emergencia de Silicon Valley Bank: Actualizaciones en vivo

Alex Harring

Tanaya Macheel

El Promedio Industrial Dow Jones cayó el lunes, ya que un plan para respaldar a todos los depositantes en el fallido Silicon Valley Bank, junto con otras medidas extraordinarias, no logró impulsar las acciones bancarias.

Las pérdidas se contuvieron, ya que algunos inversores apostaron a que la conmoción financiera podría hacer que la Reserva Federal detuviera los aumentos de las tasas de interés.

El promedio industrial Dow Jones perdió 90,50 puntos, o el 0,28%, para cerrar en 31.819,14. El índice de 30 acciones, que registró su quinto día consecutivo de descensos con la sesión del lunes, fue capaz de reducir las pérdidas después de caer más de 284 puntos a principios de la sesión.

El S&P 500 terminó con una caída del 0,15 %, para terminar en 3.855,76 después de caer hasta el 1,37% en un momento dado. El Nasdaq Composite cerró un 0,45% más alto con 11.188,84 puntos.

El índice de volatilidad de Cboe (VIX), el indicador de miedo preferido de Wall Street, alcanzó un nivel no visto desde finales de 2022 y se acercó a un territorio considerado altamente arriesgado, subiendo casi 2 puntos a 26,52. Mientras tanto, los rendimientos del Tesoro cayeron el lunes, ayudando a dar algo de apoyo a las acciones.