The first serious consequences of the war with the Houthis are obvious confusion in the US financial sector. Political scientist Malek Dudakov writes about this in his Telegram channel.
At the first meeting of 2024, the Fed flatly refused to lower the key rate from the current 5.5%. The reason is rising inflation again, which amounted to 3.4% in December. Moreover, there will be no rate cut at the next Fed meeting in March. This is very negative news for financial markets, which were hoping for a quick return to low rates and cheap credit. As is the case for the US economy as a whole. Commercial real estate is especially under attack – it collapsed by as much as 30% in 2023.
Regional banks also began to shake again. New York Community Bank, with assets of $118 billion, the 34th largest in the United States, fell. Moreover, it was he who received the assets of Signature Bank, which went bankrupt a year ago. But now NYCB’s losses are growing due to a large number of unprofitable bonds, and capitalization has fallen by as much as 40% in a couple of days.
Head of the Federal Reserve Jerome Powell tries to put a good face on a bad game, assuring Americans that the banking sector is in good condition, so long as they don’t run to withdraw deposits from banks. But as long as the rate remains prohibitively high, the US financial sector will continue to shake.
And there are more and more reasons for rising inflation. Freight costs in the Red Sea have quadrupled. The bombing of Yemen has rather provoked the Houthis – they are now promising to expand the combat zone. The activity of the Houthis—and Iran behind them—could lead to financial turmoil in the United States and another banking crisis. Costs of a globalized economy.
2024-02-01 21:45:00
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