July 10, 2023
United States:
Powell Haunted by Repo Crisis as Fed Aims to Cut Balance Sheet
Tucked away in hours of congressional testimony by Federal Reserve Chair Jerome Powell last month was an admission that the central bank was blindsided by the impact of shrinking its balance sheet four years ago.
While Powell assured lawmakers the Fed is committed to avoiding a repeat of 2019 — when the repo market, a key part of US financial plumbing, seized up — Wall Street economists and strategists caution that quantitative tightening remains complex and hard to predict. Known as QT, it involves letting Fed bond holdings mature without replacement, draining cash from the financial system.
Europe:
Russia-Linked Oil Tanker Fleet Vanishes Even Faster Than It Grew
A fleet of tankers that sprouted up out of nowhere to keep Russia’s oil moving has disbanded even faster than it emerged, underscoring the challenges involved in keeping track of who’s helping Moscow to get its petroleum to buyers around the world.
Mumbai-based Gatik Ship Management now marshals a fleet of just four oil tankers, according to Equasis, an international maritime database set up to promote safe shipping. As recently as April it had 42, having amassed most of those carriers in under a year.
Asia:
China to Extend Policies to Support Ailing Property Market
China will extend policies to support cash-strapped developers and shore up the ailing real estate sector, including allowing the postponement of loan repayments by a year.
Financial institutions will be encouraged to negotiate with real estate firms to extend outstanding loans in order to ensure the delivery of homes under construction, according to a joint statement from the People’s Bank of China and National Financial Regulatory Administration. Some outstanding loans including trust loans due before 2024 will be given a one-year repayment extension, it said.
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