Latest news with #InterestRate
Bloomberg
a day ago
- Business
- Bloomberg
Bank of America Lowers US Rates Outlook on Weak Data, Fed Risks
Interest-rate strategists at Bank of America lowered Treasury yield forecasts in anticipation that recent economic data will drive a shift in the Federal Reserve's assessment of risks. Strategists led by Mark Cabana cut their year-end forecast for two-year yields to 3.5%, from 3.75% previously. They see 10-year yields at 4.25% by the end of December compared with the previous estimate of 4.5%.
Yahoo
28-07-2025
- Business
- Yahoo
Canadian dollar hits 10-day low against greenback; gains versus other G10 currencies
By Fergal Smith TORONTO (Reuters) -The Canadian dollar weakened to a 10-day low against its U.S. counterpart on Monday but its decline, ahead of a Bank of Canada interest rate decision this week, was the smallest by far among the Group of 10 currencies. The loonie was trading 0.2% lower at 1.3730 per U.S. dollar, or 72.83 U.S. cents, after touching its weakest intraday level since July 18 at 1.3742. The U.S. dollar jumped 1% against a basket of major currencies after the U.S. and the EU struck a framework trade pact, the latest in a flurry of deals to avert a global trade war. "It's mostly a broad-based (U.S.) dollar recovery story that began earlier in July," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. "It's a technical correction supported by higher U.S. interest rates here in July. I think it's got a little bit more room to run, but what concerns me is that the big events this week are still ahead of us." Both the Federal Reserve and the Bank of Canada are due to make interest rate decisions on Wednesday. The BoC is likely to keep its benchmark rate unchanged at 2.75% for the third straight meeting, economists and market analysts predict, as firm core inflation and robust job growth offset trade uncertainty. Talks between Canada and the United States on a trade deal are at an intense phase, Prime Minister Mark Carney told reporters, reiterating that an agreement without any tariffs at all was unlikely. Canada sends about 75% of its exports to the U.S., including oil which settled 2.4% higher at $66.71 a barrel. Canadian bond yields edged higher across the curve. The 10-year was up one basis point at 3.535%.
Bloomberg
15-07-2025
- Business
- Bloomberg
Muni Bonds See Worst Day Since Tariff-Fueled Rout in April
Municipal bonds sold off on Tuesday, with benchmark yields rising as much as eight basis points, as new inflation data caused traders to par back expectations for an interest-rate cut in September. The yield on the 10-year muni benchmark rose eight basis points to 3.25% in the market's worst day since tariff-fueled volatility in April.
Time of India
10-07-2025
- Business
- Time of India
Low rates do not push credit growth: BCG
Mumbai: A new report by the Boston Consulting Group (BCG) warns that Indian banks must prepare for a period of heightened interest rate volatility after more than a decade of relatively stable and downward-trending rates. The study, Interest Rate Sensitivity in Indian Banking, highlights that the impact of policy rate changes on bank performance is neither immediate nor uniform, and that credit growth is more dependent on borrower sentiment and lender confidence than on rates alone. Empirical evidence underscores this point: credit growth remained weak during 2014–2016 and 2018–2020 despite declining or stable rates, while lending surged in 2022–2023 amid rising rates. The only clear instance where falling rates aligned with credit growth was during 2016–2018. BCG finds that unless credit demand is robust, rate cuts—unless sustained for 18–24 months—rarely drive significant lending increases. The Reserve Bank of India (RBI) raised the repo rate by 250 basis points between 2022 and 2023 to tackle inflation, only to cut it by 100 basis points in early 2025 to boost growth. This policy reversal reflects mounting external risks—geopolitical tensions and structural imbalances in the global financial system—that now weigh more heavily on India's interest rate path than domestic growth-inflation trade-offs. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo BCG's report urges banks to abandon linear forecasting and adopt scenario-based planning. It shows that repo rate changes take 12–24 months to influence key metrics such as credit, deposits, and Net Interest Income (NII), with public sector banks (PSBs) proving more responsive than private ones. A 50 basis point repo hike, for example, led to a 1.4% increase in advances for PSBs, compared to 1.16% overall. Interestingly, deposit mobilisation showed little correlation with interest rates. PSBs, in particular, were largely unaffected, thanks to their stable depositor base. Even private banks responded weakly. Factors such as customer engagement, competition, and liquidity management mattered more than monetary policy. By contrast, NII was highly rate-sensitive. A 50 basis point increase in the repo rate boosted NII by 1.11% across all scheduled commercial banks, and by 1.45% for PSBs. Rate cuts, predictably, led to income declines. To navigate this shifting landscape, BCG recommends overhauling internal pricing frameworks, which still rely too heavily on historical cost of funds. This misaligns profitability and misallocates capital. A move toward marginal cost-based pricing and improved balance sheet simulations is essential. Meanwhile, changing saver preferences—toward mutual funds, pensions, and direct investments—mean banks must use data science to better understand and serve depositors, the report said. Reply to allReplyForward Add reaction Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Zawya
08-05-2025
- Business
- Zawya
CBUAE maintains interest rates unchanged at 4.40%
ABU DHABI: The Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) at 4.40%. This decision was taken following the US Federal Reserve's announcement today to keep the Interest Rate on Reserve Balances (IORB) unchanged. The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities. The Base Rate, which is anchored to the US Federal Reserve's IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.
