The Daily Chase: Investors react to Fed messaging; Businesses speak out on renewed restrictions
BNN Bloomberg
The U.S. Federal Reserve appears to have convinced markets that it can execute a soft landing, as the doubling of its taper rate and a suggestion of three rate hikes in each of 2022 and 2023 has been warmly received by investors.
The U.S. Federal Reserve appears to have convinced markets that it can execute a soft landing, as the doubling of its taper rate (putting the central bank’s asset-buying program on pace to end in March) and a suggestion of three rate hikes in each of 2022 and 2023 has been warmly received by investors. At least for now.
However, Societe Generale Strategist Kit Juckes offered up this assessment in his morning note to clients: “The idea that a gradual tightening in policy can put the economy on a smooth glide-path back to growth and inflation equilibrium is implausible, but after 20 years of ‘buy the dip’ the equity market is trained to look on the bright side of life.”
So, is this a case of complacency? Or did Fed Chair Jerome Powell truly manage pitch-perfect messaging yesterday? We’ll continue to assess that this morning and frame it against the bigger picture of a clear shift in tone from the world’s major central banks as the Bank of England today underscored its focus on inflation by hiking its benchmark rate and after Bank of Canada Governor Tiff Macklem yesterday said his team is “getting closer” to having to change its messaging on the timing of a rate move.
RACING TO CONTAIN OMICRON
Ontario is slashing capacity in half for venues like sports arenas and stadiums, movie theatres, fitness facilities and concert halls that can normally welcome 1,000+ spectators. The federal government is steering Canadians away from non-essential travel, eliciting a furious response from WestJet. And we only need to look to the United Kingdom – where a record daily number of new cases was just reported – to understand why officials are motivated to act. We’ll chase reaction from the business owners most directly affected by the latest policy announcements, and Bay Street analysis on the stakes for the publicly-traded names among them.
OSC WEIGHS EX-BRIDGING FINANCE CEO’S COMPLAINT
