‘Things Continue to Look Up’ for US Economy
$DIA, $SPY, $QQQ, $VXX
The Fed is carefully raising interest rates against a growing economic background that has cheered up conditions for the nation’s lenders, said Federal Reserve Bank of Atlanta President Raphael Bostic.
After years of emergency-era monetary policy, Fed officials are “in an increasing-rate environment, and are in the midst of a carefully-calibrated return to a more normal Fed footing, which includes the gradual reduction in our balance sheet,” Mr. Bostic, a voter this year on the Fed’s rate-setting panel (FOMC), told a banking conference in Atlanta.
Fed officials saw stronger US growth sustaining additional interest-rate increases, minutes of their January FOMC meeting released Wednesday showed.
Investors expect the Fed to raise rates at its March meeting according to pricing in interest-rate futures contracts, and are lining up with the Fed’s projection for a total of 3 maybe 4 hikes this year.
“Our most recent GDPNow estimate projects growth of 3.2% in Q-1, which is a lot more than it was last Q-1, and so things continue to look up,” Mr. Bostic said, referring to the Atlanta Fed’s tracking model of GDP (gross domestic product).
For banks, Q-4 Y 2017 results signal that “discounting the transitory effect of changes in the tax code, core earnings are solid and credit quality remains stable.”
In a related story
An easing of financial rules will soon unleash pent-up mergers and acquisitions among mid-sized US banks, according to deal bankers, analysts and bank executives.
Deal activity in the sector languished under Mr. Hussein Obama since the 2007-2009 financial crisis thanks to stricter rules on lenders with more than $50-B in assets and aggressive enforcement of rules barring banks with compliance issues from expanding.
Lawmakers, spurred on by the leadership of Republican President Donald Trump, are set to raise the threshold for systemically important banks, making lenders that had capped growth to avoid the added compliance and capital costs more inclined to combine.
Friday, the major US stock market indexes finished at: DJIA +347.51 at 25309.99, NAS Comp +127.30 at 7337.39, S&P 500 +43.34 at 2747.30
- NAS Comp +6.3% YTD
- S&P 500: +2.8% YTD
- DJIA +2.4% YTD
- Russell 2000: +0.9% YTD
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Have a terrific weekend.
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