Federal reserve increased its discount rate by 25 bps. It was expected but the timing is earlier than expected. It was most symbolic because very few banks go to discount window right now. In short run, it will move up U$ and put some pressure on the market. I will be more interested in CPI, If CPI is high, it will force Fed's hand.
One area is deteriorating is municipal bonds in U.S. There will be a few bankruptcies this year. States will get help from Federal Government and they can raise taxes but municipal governments have very few options.
No comments:
Post a Comment