US Federal Reserve

The warnings of longer-term trouble come as investors are growing somewhat more hopeful of the Federal Reserve's ability to rein in sky-high inflation without causing a recession

The Fed's report showed that by bank size, lending decreased $23.5 billion at the 25 largest domestically chartered banks in the latest two weeks

Before the collapse of Silvergate Capital Corp and other regional institutions, bigger banks were steeling themselves for more regulations since Michael Barr took over as the Fed's No. 2 official

The solutions lie with the Fed, VCs, in-house management, and Silicon Valley itself

Sterling rose to a new 10-month high against the dollar, while the euro reached its highest since February

The Federal Reserve's favoured inflation gauge slowed sharply last month, an encouraging sign in the Fed's yearlong effort to cool price pressures through steadily higher interest rates. Friday's report from the Commerce Department showed that consumer prices rose 0.3% from January to February, down from a 0.6% increase from December to January. Measured year-over-year, prices rose 5%, slower than the 5.3% annual increase in January. The report also showed that consumer spending rose 0.2% from January to February, a drop from a month earlier but an indication that households are still providing fuel for economic growth. Taken as a whole, Friday's figures show that inflation pressures, though easing gradually, still maintain a grip on the economy. The Fed has raised its benchmark rate nine times since March of last year in a strenuous drive to tame inflation, which hit a four-decade high in mid-2022. Even after having slowed, consumer prices are still posting year-over-year increase

The turbulence in FY23 can be attributed to a concoction of interest rate hikes, foreign investment outflows, a global war, soaring food, fuel prices and a global banking crisis

The Federal Reserve's bank supervisors informed Silicon Valley Bank's management as early as the fall of 2021 of risks stemming from its unusual business model, a top Fed official said on Tuesday, but the bank's managers failed to take the steps necessary to fix its problems. The Fed official, Michael Barr, the nation's top banking regulator, said during a Senate Banking Committee hearing that the Fed is considering whether stronger bank rules are needed to prevent a similar bank failure in the future. Supervisors had rated the bank at a very low rating," Barr said. At the holding company level it was rated deficient, which is also clearly not well-managed. The timeline that Barr laid out for when the Fed had alerted Silicon Valley Bank's management to the risks it faced is earlier than the central bank has previously said the bank was on its radar screen. Silicon Valley's deposits grew rapidly and were heavily concentrated in the high-tech sector, which made it particularly ...

The small-caps were hit on the chin with the S&P BSE Small-cap index slipping nearly 7 per cent thus far during in FY23, underperforming the S&P BSE Midcap and the BSE 500 indexes

Another major development in the crypto world during the week was the US Securities and Exchange Commission's 'Wells notice' to crypto exchange Coinbase

Bets that US central bank has finished raising rates cushion markets

Fed is striving to maintain a fine balance

CLOSING BELL: Selling in heavyweights like SBI (down 2 per cent), HCL Tech, Infosys, Reliance Industries, HDFC Bank, HDFC, and ICICI Bank weighed on the benchmarks

Fed Chair Jerome Powell last night said "rate cuts are not in our base case" for the remainder of 2023

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The Committee said that it seeks to achieve maximum employment and inflation at the rate of 2 per cent over the longer run

While the Fed has been steadfast in its objective of curtailing inflation, focus has now shifted to maintaining a balance between bringing down inflation and avoiding financial instability

CLOSING BELL: Sectorally, the Nifty Pharma index advanced 1 per cent, followed by the Nifty PSU bank added 0.8 per cent.

Many believe that the committee may go for another 25 basis point hike in repo at the April policy

CLOSING BELL: The market breadth was firmly in the favour of buyers as the broader markets, too, rose in tandem with the benchmark indices