The noise
-
Wall Street’s biggest banks successfully navigated the Federal Reserve's annual stress test, overcoming a significant obstacle in their quest to distribute billions of dollars to shareholders through dividends and repurchases. This annual exam of 23 prominent US banks carries great significance within the industry. Its results dictate the amount of capital banks must reserve as a safeguard, with the most recent evaluation’s opinion being that all these banks are equipped to withstand a severe global recession.
-
Leaders of the world’s top central banks appeared together in Portugal this week, with Fed, ECB, and BoE chiefs reiterating they have a way to go in taming inflation, with rates set to go higher in the coming months. US Fed chairman J Powell said, “Policy hasn’t been restrictive enough for long enough” although they all indicated that recessions off the back of further tightening in their respective economies would not be the most likely outcome.
-
Chile is set to accelerate the growth of its green energy transition, following a $150m loan from the World Bank to invest in green hydrogen projects. Green hydrogen can help decarbonise sectors where electrification would not otherwise be technically or economically viable, such as long-distance transport. South American countries rank among the highest in the world for renewable energy generation and use.
The numbers
The nuance
The cost-of-living crisis in the UK has been affecting most of the country’s households since late 2021. One thing that has been attributed to helping customers stay afloat during the crisis is the additional savings built up over the Covid pandemic lockdown period. This buffer has given consumers a savings pile to fall back on in our current state of play involving rising interest rates and costs. The notion is that as long as consumers have this reserve to rely on, the potential economic downturn resulting from increasing rates and expenses may not have the recessionary effect that is either feared or sought after.
From the perspective of a British central banker, British consumers have proved to be a much tougher side to bowl out than they had hoped for. Several more rate hikes are expected in the coming months, as UK households are pulling money out of their savings accounts at the fastest rate ever recorded. This shows signs that the savings built up over the pandemic are being burned through and that BoE actions may soon take full effect. Despite this gloomy market outlook, it does not necessarily close the window of opportunity for investment returns.
All investment views are presented for information only and are not a personal recommendation to buy or sell. Past performance is not a reliable indicator of future returns, investing involves risk and the value of investments, and the income from them, may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested. Any views expressed are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness by atomos. Any expressions of opinion are subject to change without notice.