The three things I would tell my clients

a.   Central Banks are taking a risk hiking rates in the middle of a banking crisis. But not hiking could hurt their credibility as inflation fighters, costing more over the longer term.

b.  There are really no good options. This is a function of having to deal with an era of higher rates, when prior decision made assumed forever-low rates.

c.   Deutsche Bank remains in the crosshairs, and in danger from a market-induced panic, but it’s in a much better position than Credit Suisse

A War on Two Fronts

The old adage says: “The Fed will continue to hike until it breaks something”.

Most of this sentence has already become a reality. The first major casualty of the central banks’ rapid hike cycle is the regional banking system in the US.

But, after a week of rate hikes on both sides of the Atlantic, central banks have shown that they are willing to continue to hike rates, even after something has clearly been broken, and while there’s no assurance that the storm is over.

Click here to read the full article 



020 7071 3945


Throughout our site you will find links to external websites. Although we make every effort to ensure these links are accurate, up to date and relevant, we cannot take responsibility for pages maintained by external providers.