Fed's Waller Says U.S. Financing Pressures May Raise Longer-Run Neutral Rate; Only Time Will Tell Impact Of U.S. Fiscal Position; Treasury Supply Outstripping Demand Will Increase Neutral Rate; Banking Regulations, Central Banks, Sovereign Wealth Funds, And Capital Market Liberalization Unlikely To Raise Neutral Rate Significantly
Portfolio Pulse from Benzinga Newsdesk
Fed's Waller suggests that U.S. financing pressures may raise the longer-run neutral rate. He notes that the impact of the U.S. fiscal position is uncertain, but an oversupply of Treasury bonds could increase the neutral rate. Banking regulations, central banks, sovereign wealth funds, and capital market liberalization are unlikely to have a significant impact.

May 24, 2024 | 1:23 pm
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Fed's Waller suggests that U.S. financing pressures and an oversupply of Treasury bonds may raise the longer-run neutral rate, potentially impacting SPY.
An increase in the longer-run neutral rate could lead to higher interest rates, which may negatively impact equity markets, including SPY. The oversupply of Treasury bonds suggests increased borrowing costs, which could also weigh on stock prices.
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