First Republic bank collapses, Fed's last rate hike?
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The First Republic Bank of the United States has become the third large U.S. bank to fail within two months. The Fed's interest rate decision is approaching, and the Fed's last interest rate hike is still in suspense.
JPMorgan buys First Republic, Fed's monetary policy path divided
WASHINGTON (Reuters) - California's Department of Financial Protection and Innovation (DFPI) said regulators had taken control of First Republic Bank, the third bank to fail in two months, according to the latest Reuters report. Large U.S. banks.
In fact, since the collapse of Silicon Valley Bank and New York Signature Bank in March this year, First Republic Bank has been in crisis. Investors and depositors are growing concerned about the bank's high levels of uninsured deposits and low-interest loans.
Although 11 large banks including Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citibank, Bank of America and Wells Fargo have provided 330 billion in deposits, the crisis of First Republic Bank has continued to simmer in recent days, and its stock price has also plummeted.
The announcement issued by JPMorgan Chase said that the assets of the First Republic Bank it acquired included about 173 billion US dollars in loans and about 30 billion US dollars in bonds, and at the same time it obtained about 92 billion US dollars in deposits from the First Republic Bank, including a number of large banks. 330 billion in deposits provided. JPMorgan did not buy First Republic's corporate debt and preferred stock.
There is no doubt that the collapse of the First Republic Bank of the United States will inevitably arouse market concerns about the tightening of credit in the US banking industry as the Federal Reserve's May interest rate decision is approaching. International Monetary Fund (IMF) Managing Director Georgieva (Kristalina Georgieva) said on Monday (May 1) that the banking sector is expected to expose more vulnerabilities.
Georgieva said the sharp rise in interest rates from low to high levels was one reason for the exposure of some banks' vulnerabilities, adding that the pain may not be over yet. The IMF last month trimmed its 2023 global growth forecast slightly as interest rate hikes cooled economic activity and a flare-up in financial system turmoil could reduce output to near-recession levels.
The author believes that the banking crisis and economic recession in the U.S. stock market will indeed help inflation go down. At present, the market has fully priced in the Fed’s 25 basis point interest rate hike in May. But it's clearly inappropriate to bet on a Fed monetary policy shift because of a recession.
Considering that the current U.S. inflation level is still far away from the 2% target level, the Federal Reserve’s maintenance of interest rates at high levels will help burst financial bubbles and reduce inflation, while the Bank of Japan’s maintenance of loose policies will help prevent the outbreak of the global financial crisis. Therefore, the author believes that non-interest-bearing assets gold and LME copper will still be under pressure and fall at the current stage.
I think gold is still bullish on the above news, but from my own feelings, I think gold will depend on whether the Fed raises interest rates in the near future. If the interest rate is raised, it will indeed decline for gold. So we still have to see whether the Fed raises interest rates through the vote.
JPMorgan buys First Republic, Fed's monetary policy path divided
WASHINGTON (Reuters) - California's Department of Financial Protection and Innovation (DFPI) said regulators had taken control of First Republic Bank, the third bank to fail in two months, according to the latest Reuters report. Large U.S. banks.
In fact, since the collapse of Silicon Valley Bank and New York Signature Bank in March this year, First Republic Bank has been in crisis. Investors and depositors are growing concerned about the bank's high levels of uninsured deposits and low-interest loans.
Although 11 large banks including Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citibank, Bank of America and Wells Fargo have provided 330 billion in deposits, the crisis of First Republic Bank has continued to simmer in recent days, and its stock price has also plummeted.
The announcement issued by JPMorgan Chase said that the assets of the First Republic Bank it acquired included about 173 billion US dollars in loans and about 30 billion US dollars in bonds, and at the same time it obtained about 92 billion US dollars in deposits from the First Republic Bank, including a number of large banks. 330 billion in deposits provided. JPMorgan did not buy First Republic's corporate debt and preferred stock.
There is no doubt that the collapse of the First Republic Bank of the United States will inevitably arouse market concerns about the tightening of credit in the US banking industry as the Federal Reserve's May interest rate decision is approaching. International Monetary Fund (IMF) Managing Director Georgieva (Kristalina Georgieva) said on Monday (May 1) that the banking sector is expected to expose more vulnerabilities.
Georgieva said the sharp rise in interest rates from low to high levels was one reason for the exposure of some banks' vulnerabilities, adding that the pain may not be over yet. The IMF last month trimmed its 2023 global growth forecast slightly as interest rate hikes cooled economic activity and a flare-up in financial system turmoil could reduce output to near-recession levels.
The author believes that the banking crisis and economic recession in the U.S. stock market will indeed help inflation go down. At present, the market has fully priced in the Fed’s 25 basis point interest rate hike in May. But it's clearly inappropriate to bet on a Fed monetary policy shift because of a recession.
Considering that the current U.S. inflation level is still far away from the 2% target level, the Federal Reserve’s maintenance of interest rates at high levels will help burst financial bubbles and reduce inflation, while the Bank of Japan’s maintenance of loose policies will help prevent the outbreak of the global financial crisis. Therefore, the author believes that non-interest-bearing assets gold and LME copper will still be under pressure and fall at the current stage.
I think gold is still bullish on the above news, but from my own feelings, I think gold will depend on whether the Fed raises interest rates in the near future. If the interest rate is raised, it will indeed decline for gold. So we still have to see whether the Fed raises interest rates through the vote.
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Crazy man, Gold is up and breaking 2010 just as I expected.
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