central banks

Investment and macroeconomic analyst Lyn Alden joins to explore the history and future of money. Discussing her book Broken Money: Why Our Financial System is Failing Us and How We Can Make it Better, Alden argues that our present monetary system has fallen behind technological developments. 

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Jim Reid, Deutsche Bank’s global head of economics and thematic research, joins to explain why he thinks a US downturn may still be on the way. He also thinks the US stock market is nearly the most concentrated it’s ever been, and that's not good. The top five stocks in the market make up almost a quarter of the market cap of the S&P 500, and combined with the next two, the “Magnificent 7” stocks are bigger than the Chinese market and four times the size of the UK market. 

Plus, Bloomberg Opinion columnist John Authers joins to debrief on Jim's comments and tell us why he thinks Japan has reached a point of no return. 

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Your morning briefing, the business news you need in just 15 minutes.

On today's podcast:

(1) The Bank of England risks deepening the UK's recession if it doesn't pivot to interest rate cuts soon, its former chief economist Andy Haldane warned in an interview with Bloomberg Radio.

(2) Apple will face a European Union fine close to €500 million over the regulator's investigation into allegations it silenced music-streaming rivals, including Spotify on its platforms. 

(3) High-earning British bankers, lawyers and consultants are now some of the workers most vulnerable to trade shocks, according to the Resolution Foundation.

(4) Just months after setting a 2024 target for the S&P 500 Index, Goldman Sachs Group  strategists have boosted their forecast for a second time as the stock market eclipsed the significant 5,000 milestone this month.

(5) Thomas Heatherwick is one of the best known names in modern building design. He's behind Coal Drops Yard in London, Vessel and Little Island in New York - and the cauldron for the Olympic Flame in the 2012 London games. He's been speaking to us here on Bloomberg Radio about the need for more homes to be built in the UK and says he'd like to be involved in designing new social housing in Britain. 

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A little less than a year ago, the US financial system was rocked by its first major banking drama since 2008. While the crisis was eventually contained, and only three lenders ended up collapsing, the experience re-ignited an ongoing conversation about the way we rescue troubled lenders. Not only did the Federal Reserve launch a new liquidity program called the Bank Term Funding Program as part of its support to the banking system in 2023, but regulators are now talking about changing existing facilities, including the Federal Home Loan Banks (FHLBs) and the discount window. For instance, Michael Hsu of the Office of the Comptroller of the Currency's has proposed that banks be required to tap the discount window and "pre-position" collateral at the facility, just in case they one day need it. In this episode, we speak with Steven Kelly, associate director of research at the Yale University Program on Financial Stability, about the constellation of existing emergency facilities for banks, how they've evolved over time, and the changes that could be made to them now.

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Your morning briefing, the business news you need in just 15 minutes.On today's podcast:

(1) The Federal Reserve held interest rates steady for a fourth straight meeting and signaled an openness to cutting them, though Fed Chair Jerome Powell threw cold water on investors' hopes that reductions would begin in March.

(2) The Bank of England is likely on Thursday to deliver a brighter outlook for the UK economy, reducing its forecast for inflation this year and potentially opening the way to interest-rate reductions that could boost growth.

(3) Deutsche Bank has raised its mid-term revenue target. Planned cost savings the Frankfurt-based bank had previously announced will result in the reduction of some 3,500 jobs, mostly in the back office, Deutsche Bank also said.

(4)  In an unscripted scene during tense testimony Meta CEO Mark Zuckerberg stood before a packed Senate hearing room and apologized directly to the families of children who were victims of sexual exploitation on social media platforms.

(5) Prime Minister Giorgia Meloni is increasingly counting on the same people who propelled her to power to keep Italy solvent: its citizens. 

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It's a busy week for the bond market with a meeting of the Federal Reserve and the release of the US Treasury's quarterly refunding statement. While a lot of people have been focusing on when the Fed will cut benchmark interest rates, there's also an ongoing debate about how fast the central bank will shrink its balance sheet given last year's banking crisis and the recent drama in the repo market. In this episode, we speak with Mark Cabana, longtime rates strategist at Bank of America, about the big questions lurking behind the week's events. We talk about who will buy all the bonds the US is selling, what will happen to bank balance sheets as rates go down, and the impact of liquidity on the broader market.

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Your morning briefing, the business news you need in just 15 minutes.

On today's podcast:
(1) The Chancellor Jeremy Hunt has told Bloomberg that Britain is a safe harbour for investors in an increasingly unstable world. Speaking on the sidelines of the World Economic forum in Davos, Hunt also hinted at tax cuts in the March budget as a way to deliver growth.

(2) Houthi militants in Yemen fired missiles at an American-owned commercial vessel on Thursday, the same day President Joe Biden acknowledged US airstrikes have not halted the Red Sea attacks.

(3) Our Economics and Government Editor Stephanie Flanders joins us to look back at the week that was in Davos and what we learned from the gathering of business and political leaders. 

(4)Israel will insist on security control over the West Bank and Gaza Strip in the foreseeable future after the war, Prime Minister Benjamin Netanyahu said, rejecting rule by the Palestinian Authority despite calls from the US.

(5) Congress passed a temporary spending bill to avert a partial US government shutdown this weekend, sending the legislation to the White House, where President Joe Biden plans to sign it.

(6) JPMorgan Chase & Co. raised Chief Executive Officer Jamie Dimon’s pay to $36 million for 2023, a year in which the bank notched the highest profit in the history of American banking.

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A top IMF official has warned that central banks need to move cautiously on cutting rates this year, BP has appointed interim boss Murray Auchincloss as its permanent chief executive, and Rishi Sunak quelled a rightwing Conservative revolt over his flagship Rwanda asylum bill. Plus, the FT’s Joe Leahy explains why China’s population decline accelerated in 2023 as its economy grew at one of the lowest rates in decades. 

Mentioned in this podcast:

IMF official warns central banks against fuelling inflation with rapid rate cuts 

Stocks drop as ECB and UK inflation puncture interest rate cut hopes

BP appoints interim boss Murray Auchincloss as permanent chief

Tory rebels abandon revolt over Rishi Sunak’s Rwanda bill

China’s population decline accelerates as economy reaches low growth target

The FT News Briefing is produced by Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help by Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Monica Lopez. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.

Read a transcript of this episode on FT.com

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The FT’s Peter Spiegel, Katie Martin and Elaine Moore preview what could happen in geopolitics, markets and artificial intelligence in 2024.

The FT News Briefing is produced by Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help by Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Monica Lopez. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music. 

Read a transcript of this episode on FT.com

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Your morning briefing, the business news you need in just 15 minutes.

On today's podcast:
(1) Europe’s central bankers are in no hurry to join the US pivot toward interest-rate cuts: the Bank of England kept interest rates at a 15-year high, sticking with its message that borrowing costs will remain elevated for some time despite growing bets on a wave of cuts in 2024. And European Central Bank policymakers are largely united in expecting to cut interest rates later than financial markets currently anticipate, according to officials familiar with their thinking.

(2) Hungary has blocked a new 50-billion-euro EU financial aid package for Ukraine.

(3) China's central bank has injected a record amount of cash into the economy. 

(4) Citigroup Inc. will shutter its municipal business, one of the most dramatic moves yet by Chief Executive Officer Jane Fraser as she seeks to squeeze better returns out of the Wall Street giant.

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Your morning briefing, the business news you need in just 15 minutes.On today's podcast:

(1) The Federal Reserve held interest rates steady for a third meeting and gave its clearest signal yet that its aggressive hiking campaign is finished by forecasting a series of cuts next year.

(2) Virtually no corner of financial markets was left out of Wednesday's cross-asset advance: Global shares spiked higher. Front-end Treasuries posted their best day since March. World currencies surged against the dollar and corporate bonds rallied.

(3) Traders have ramped up bets on interest-rate cuts by the Bank of England next year after soft GDP data reinforced the view that policymakers won't be able to keep monetary policy tight for so long.

(4) Today's European Central Bank decision is also being watched for how forcefully policymakers push back against bets on interest rate cuts.

(5) Republicans in the US House voted Wednesday to formally authorize an impeachment inquiry into President Joe Biden, escalating a probe that has been underway for several months.  

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Recessions aren’t like they used to be, says Kokou Agbo-Bloua,

The Societe Generale global head of economics, cross-asset and quant research contends fixed rate-debt and hefty cash piles have help companies develop short-term immunity to rising interest rates. So has the “kinetic velocity” of the vast fiscal stimulus of the last few years, he says. 

Agbo-Bloua argues on this week’s Merryn Talks Money that while all of that’s nice for now, it can’t last.

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On today's podcast:

(1) Alphabet CEO Sundar Pichai said he expects China to be "at the forefront" of artificial intelligence, and said it's important for the US to collaborate with the Asian nation on both regulation and innovation.

(2) Applied Materials, the largest US maker of chipmaking machinery, slid in late trading following a report that it faces a US criminal investigation for allegedly violating export restrictions to China.

(3) British companies will be able to release billions of pounds from pension funds for investment under a package of growth reforms that Chancellor Jeremy Hunt will unveil at next week's autumn statement.

(4) With Formula 1 preparing for the Las Vegas Grand Prix, Canadian billionaire Lawrence Stroll has sold a minority stake in the Aston Martin team to US private equity firm Arctos Partners.

(5) Inflation data from the US, UK and Eurozone all indicate inflationary pressures are now easing. But that also means the focus shifts from growing too fast to not growing fast enough, pushing yields across the treasury curve lower. 

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On today's podcast:
1) Sam Bankman-Fried has been convicted of a massive fraud that led to the collapse of his FTX exchange.
2) US Secretary of State Antony Blinken lands in Tel Aviv for talks with Prime Minister Benjamin Netanyahu and his War Cabinet as Israeli troops encircle Gaza City, insisting a cease-fire isn’t on the table.
3) Bank of England Governor Andrew Bailey speaks to Bloomberg. He may insist that it is “much too early to be thinking about rate cuts,” but the financial markets have other ideas.
4) Apple’s disappointing holiday-quarter outlook has cast a spotlight on its mounting problems in China.
5) Transport services across the UK, France and the Netherlands are facing disruption due to high winds and heavy rain from Storm Ciarán. 

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Despite a rough few years for her Innovation exchange-traded fund, Ark Investment Management founder Cathie Wood still sees a bright future. She joins this week to talk about her outlook, Tesla, the merits of Bitcoin and more. 

Plus, John Stepek joins to discuss the Bank of England's decision to keep rates unchanged. 

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Israeli troops have entered Gaza City, European private equity group CVC Capital Partners has postponed plans to float until next year, and central banks are hitting pause on interest rate rises while inflation stays strong.

Mentioned in this podcast:

Israeli army attempts to ‘encircle’ Gaza City as Joe Biden calls for pause in fighting

CVC Capital Partners postpones plans for Amsterdam listing

Central banks hold interest rates at a scary time

BoE expected to leave rates unchanged as inflation remains strong

AI companies agree to government tests on their technology to assess national security risks

Sam Bankman-Fried convicted of fraud over FTX’s collapse

The FT News Briefing is produced by Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Our engineer is Monica Lopez. Additional help by Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.

Read a transcript of this episode on FT.com

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In the past week, the bond market has experienced a historic selloff. Yields on benchmark 10-year US Treasuries soared towards 4.9% while those on 30-year debt reached the highest since 2007. But the exact cause of these dramatic moves in the most important market in the world aren't entirely clear, with people looking at everything from the Federal Reserve's outlook for interest rates, to the the jump in the price of oil, or booming supply as the deficit expands, as well as more technical things like the term premium. So what's driving the selloff and how do we disaggregate interrelated things like supply and demand? How do you decompose longer-term and short-term factors feeding into the price of US Treasuries? What can stem the big moves? And what are investors saying about their appetite for US debt? We speak with Jay Barry, co-head of US interest rate strategy at JPMorgan Chase, about the big bond market selloff.

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