Financial stocks fall as investors watch central bank moves – Finance Roundup
Shares of banks and other financial institutions fell as investors assess the outlook for interest rates in the United States and abroad.
European Central Bank President Christine Lagarde has outlined plans to raise interest rates for the first time in more than a decade, joining many of her peers in raising borrowing costs to fight against persistent inflation that is spreading far beyond the United States.
For Jerome Powell, his counterpart at the Federal Reserve, it’s another sign that central banks around the world are following his lead to focus more on inflation – which is now the fastest in four decades – rather than the strengthening growth prospects. after two years of pandemic. Powell will likely focus on Friday’s U.S. Consumer Price Index data.
The Fed’s next move – likely another half-point hike – will come next week, June 15. After that, the Fed will have to judge how high and how fast to raise rates without bringing the economy to a screeching halt.
In corporate news, Credit Suisse chief executive Thomas Gottstein said a report that the bank could be taken over by State Street was “really stupid” and that it can fix itself. The CEO is under pressure from investors to show the bank has a credible strategy after a series of scandals and financial losses.
Write to Amy Pessetto at [email protected]
(END) Dow Jones Newswire