Money markets rattled as inflation fears overtake Covid concerns
Markets also fear market chaos of a taper tantrum reaction to any steps by central banks to trim back easy money
17 March 2021 • 6:00am
Inflation has replaced Covid as the top worry for international investors for the first time since February 2020, as the vaccine rollout raises hopes the worst of the pandemic has passed.
Financiers are instead increasingly concerned about inflation, with fears that the post-lockdown recovery could overheat in a dangerous boom.
Inflation was cited as the top worry by 37pc in a BofA Global Research survey of 225 investment professionals managing $645bn (£463.5bn) in assets.
Back to the 1970s as Fed fuels boom and hopes for no Burns marks theglobeandmail.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from theglobeandmail.com Daily Mail and Mail on Sunday newspapers.
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WASHINGTON (Reuters) - The U.S. economy is heading for its strongest growth in nearly 40 years, the Federal Reserve said on Wednesday, and central bank policymakers are pledging to keep their foot on the gas despite an expected surge of inflation.
“Strong data are ahead of us,” a confident Fed Chair Jerome Powell said after a two-day policy meeting, ticking off the list of forces Fed officials expect will produce 6.5% GDP growth this year - from massive federal fiscal stimulus to optimism around the success of coronavirus vaccines.
“The (stimulus) checks are going out . COVID cases are coming down. Vaccination is moving quickly,” Powell said, marking a moment in which a body of top U.S. economic officials expect growth in the United States to rival that of China this year, not to mention surging quickly beyond that of Europe and Japan.
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NEW YORK, March 17 (Reuters) - The eurodollar and Fed funds markets, which track short-term interest rate expectations, on Wednesday reduced bets on the time frame of a potential tightening by the U.S. Federal Reserve after it dampened expectations of an early move.
Trading has been choppy after the Fed statement and Fed Chairman Jerome Powell’s news briefing, with futures pricing changing frequently, therefore shifting rate hike bets as well.
In the more liquid eurodollar futures market, traders have priced in a 90% chance of a Fed hike by March 2023 after the Fed statement, pushing back from December 2022.
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