Harsher economic conditions and higher rates have changed priorities for asset manager portfolios, both said.įixed income has become the asset class of choice, said Dhar. would slip into a recession in the second half of the year.įidelity's Boscher said there would be a visible slowdown in the United States and Europe, with a soft landing for the economy possible if growth in emerging markets and China holds up. What the Fed has done since is to catch up - and catch up pretty effectively," said Dhar.ĭhar said if credit conditions tightened enough, the U.S. The transitory story went on for way to long. The Fed too is expected by traders to lift rates by 25 basis points (bps) to a range of 5.00%-5.25% when it unveils its next rate decision on May 3. Higher rates should be a permanent expectation, he said.īritain was the only country in western Europe with double-digit inflation in March, data showed on Wednesday, bolstering bets the BoE will raise rates again in May. We have seen credit conditions tighten dramatically in the past month or so," said Shamik Dhar, chief economist at BNY Mellon Investment Management and a former Bank of England (BoE) official.Īn added danger, said Dhar, was any remaining question, particularly in Britain, that inflation might be transitory. "The economy has been assailed by lots of things at the same time. Federal Reserve and European Central Bank have ramped up borrowing costs over the past year to curb an inflation surge not seen in decades.Between them, central banks in the developed world have hiked rates by over 3,000 basis points in this tightening cycle. The International Monetary Fund last week trimmed its 2023 global growth outlook as higher interest rates cool activity but warned a severe flare-up of financial system turmoil could slash output to near recessionary levels. The "biggest threat" to the economy is a "true and visible credit crunch", Romain Boscher, non-executive director, and former equities CIO at Fidelity International, which has over $660 billion in total client assets under management, told the conference. lenders and the forced takeover of Credit Suisse roiled financial markets in March, and a sharp selloff in bank stocks tightened lending conditions further, raising concerns about a global downturn. PARIS, April 19 (Reuters) - The biggest threat to the economic outlook is a credit squeeze that has not finished filtering through the financial system, a senior official at Fidelity International told a European equities conference on Wednesday.įor asset managers, hedge funds and traders gathered in Paris for the Tradetech equity trading conference, recession risks were a key talking point.
0 kommentar(er)
