The ECB just raised its key rates again today, by 25bp (main Refi rate at 4.50%, deposit rate at 4.00%).

Fitch Ratings downgrades the U.S. from AAA to AA+ due to debt ceiling standoffs and fiscal concerns. Disagreements arise, but the downgrade reflects rising debt and governance issues. Markets react with higher bond yields, prompting a closer look at potential implications for investors.

The possibility of a “technical default” by the US has been raised as the current debt limit for the US government, set by law, is expected to be hit sometime during the summer.

Jerome Powell spoke yesterday in the US Senate to present the Fed’s semi-annual monetary policy report. The Fed’s Chair took this opportunity to reiterate the commitment of the Fed in bringing inflation lower.

Interest rate volatility rebounded sharply last week, while U.S. Treasuries had their worst week in 2023.

All major central banks raised interest rates again, but with different magnitudes and language.

In a surprise move, the Bank of Canada (BoC), after raising its policy rate by 25 bps, announced a pause at its current level (4.5%) unless economic data surprises on the upside.

After today’s hike, The Fed Funds rate will have increased by the most amount since the six months ending March 1981.

Below are answers to our client’s most frequently asked questions on recession risk, French elections, Chinese equities, the cryptocurrencies crash and our asset allocation preferences.

Yesterday the Fed hardened the tone to signal its determination to curb inflation. At all costs? After yesterday’s 75bps hike, the market’s reaction was not dramatic but all eyes will remain on the Fed’s stance in the coming months.