Russian Central Bank Hikes Interest Rate to 16% as Wartime Inflation Pressures Mount

Russia’s Central Bank (CBR) in a fight to arrest inflation and the fall of the plummeting Rouble hiked 100bps Friday morning to 16 percent, for the fifth consecutive time since summer to fight accelerating inflation. The Russian economy has been smashed but is said to be recovering on impacts from the invasion of Ukraine by scarcity and falling currency pushing up prices paid. The CBR has now raised its key rate by a cumulative 850 basis points since July, including … Continue reading “Russian Central Bank Hikes Interest Rate to 16% as Wartime Inflation Pressures Mount”

Moody’s Lowers Outlook on US Debt to Negative, Towards Fitch and S&P Global Downgrades

Rating agency Moody’s lowered its outlook on the US credit rating to “negative” from “stable”, pointing to a sharp rise in debt servicing costs with higher interest rates and “entrenched political polarization”. The move came after US markets had closed for the weekend. The move followed Fitch and S&P downgraded the US. The credit ratings agency maintained the USA’s top Aaa rating but changed its outlook to ‘negative’. Moody’s is the only of the three big credit rating agencies that … Continue reading “Moody’s Lowers Outlook on US Debt to Negative, Towards Fitch and S&P Global Downgrades”

Russia’s Currency Slide Accelerates, Is the Ruble the New Turkish Lira?

Russia’s ruble’s selloff has picked up speed falling to its weakest level in over a year, through 100 against the US dollar for the first time since the week after Russia’s invasion of Ukraine. Less than a month ago Russia’s Central Bank (CBR) in a fight to arrest the plummeting Russian Ruble hiked rates by a more-than-expected 100 basis points. The bank pointed to rising inflationary pressures. The central bank raised its key rate to 8.5% which surprised analysts polled … Continue reading “Russia’s Currency Slide Accelerates, Is the Ruble the New Turkish Lira?”

Fitch Downgrades United States Long-Term Ratings to ‘AA+’ from ‘AAA’, Outlook Stable

Rating agency Fitch downgraded the United States of America’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘AA+’ from ‘AAA’ on Tuesday. The Rating Watch Negative was removed, and a Stable Outlook assigned. The Country Ceiling has been affirmed at ‘AAA’. Fitch had warned debt limit games, political brinksmanship and reduced financing flexibility would impacts United States of America at ‘AAA’. Key Rating Drivers Ratings Downgrade: The rating downgrade of the United States reflects the expected fiscal deterioration over the next … Continue reading “Fitch Downgrades United States Long-Term Ratings to ‘AA+’ from ‘AAA’, Outlook Stable”

Ruble Slide Continues After Russian Central Bank Raises Rates 100bps

Russia’s Central Bank (CBR) in a fight to arrest the plummeting Russian Ruble hiked rates by a more-than-expected 100 basis points. The bank pointed to rising inflationary pressures. The central bank raised its key rate to 8.5% surprised analysts polled by Reuters, with a 50-basis-point hike the consensus. The ruble was 0.4% weaker against the dollar at 90.62 and 0.2% weaker at 100.73 versus the euro. It also dropped 0.1% against the yuan to 12.59. The ruble also felt the … Continue reading “Ruble Slide Continues After Russian Central Bank Raises Rates 100bps”

American Household Wealth Rises by $3.0 Trillion, $2.4 Trillion from Stocks in Q1 2023

Americans’ household wealth rose by $3.0 Trillion in the first quarter of 2023, it rose to $148.8 trillion. Stock prices have been rebounding after they fell sharply off record highs two years ago after the Federal Reserve began talking of QT and raising rates to combat inflation. Global economy slackness from the Russian invasion of Ukraine and Chinese Covid lockdowns also impacted asset prices negatively. Household debt rose 2.2 percent at an annual rate in the first quarter of 2023. … Continue reading “American Household Wealth Rises by $3.0 Trillion, $2.4 Trillion from Stocks in Q1 2023”

US Debt Ceiling Deal Done, What is In and Out, the Next Steps

U.S. President Joe Biden and Speaker Kevin McCarthy have struck a tentative deal on Saturday to raise the US debt ceiling in an ‘agreement in principle’. If approved, it averts a looming default that will bring relief to nervous markets and bring a sense of relief to the global economy. This was the 79th time it’s been raised since 1960. The US has defaulted four times, the last 1971 when the U.S. left the Bretton Woods convention. Next step is … Continue reading “US Debt Ceiling Deal Done, What is In and Out, the Next Steps”

How the U.S. Treasury Securities Market Works

The U.S. Treasury finances the operations of the United States government by collecting revenue such as tax but also by borrowing by issuing short term bills, notes and bonds. These various types of securities. are backed by the full faith and credit of the United States government. The US Treasury market is the largest and most liquid government bond market in the world. It is where the US government raises funds to finance its operations and debt obligations, and it … Continue reading “How the U.S. Treasury Securities Market Works”

US Sovereign Rating Affirmed AA+ With Stable Outlook Stable By S&P

Standard and Poors rating agency affirmed that the US sovereign ratings remain ‘AA+/A-1+’ and the outlook remains stable. The affirmation comes out in the midst of a banking crisis with the US having three bank failures in a week. SVB was the largest failure since Washington Mutual’s September 2008 collapse and the second largest in U.S. history. The S&P says sovereign stability is based on strong American institutions, a diversified and resilient economy, extensive monetary policy flexibility. The agency added … Continue reading “US Sovereign Rating Affirmed AA+ With Stable Outlook Stable By S&P”

Ukraine Credit Rating Cut Further by S&P on Protracted War and Nation Reliant on Donations

Global ratings agency S&P cut Ukraine’s credit rating further Friday, in a move that was not unexpected and follows Moody’s earlier move in the week. It also assigned a negative outlook, saying risks from the military conflict could undermine the government’s ability to meet its debt obligations. The moves flow on from S&P and Fitch swiftly cutting Ukraine on default worries. Russia’s debt was cut to junk back then. The International Monetary Fund is exploring all options to aid Ukraine … Continue reading “Ukraine Credit Rating Cut Further by S&P on Protracted War and Nation Reliant on Donations”