Happy Friday eve, readers. Phil Rosen here. Surprising no one, the Fed $4 yesterday.
That puts the Fed Funds Rate above 5% for the first time since 2007. Remember, the higher that goes, the more expensive it becomes for consumers and businesses to borrow.
The move marked the 10th consecutive hike, but the Fed nodded to the possibility that it was the last one of this cycle — $4
As for today, we're bringing you on the ground reporting from one of the $4.
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1. Elite money managers overseeing trillions of dollars convened at the 2023 Milken Global Conference in Los Angeles this week.
With the Fed's decision looming, their rate forecasts looked further into the future, and Insider's Akin Oyedele had a front-row seat. The consensus was clear: they think markets are $4.
"It's hard for me to imagine the Fed lowering rates to the degree that is priced in without a much more serious economic downturn," Karen Karniol-Tambour, co-CIO of Bridgewater Associates said at the conference. "And either one of those scenarios is $4."
According to the CME FedWatch Tool, investors see the odds of a rate cut rising steadily starting this summer, and are pricing in almost a 50% chance that the central bank drops its benchmark rate at the September meeting.
David Hunt, president and CEO at PGIM, echoed the Bridgewater exec's sentiment, saying that rates are $4 going to stay higher for a longer stretch than what markets have priced in.
"As our chief economist likes to say," Hunt said, "at higher rates, $4 over the course of the summer."
We've already witnessed some "bodies" emerge with the failure of multiple banks in the last two months.
And with yet another Fed rate hike officially in the books, financial conditions are only going to get tighter and more companies could be caught off-guard.
Hunt anticipates the clamp-down on the banking system to $4.
Here's how he put it:
"We are going to see now a real slowing that begins to happen to aggregate demand because of the $4."
Rishi Kapoor, the co-CEO of Investcorp, which manages $50 billion in assets, said at the conference that the property sector looks $4 in light of recent events.
"No doubt that the second- and third-order effect of the banking sector fallout in the US, in particular, is going to cause a $4 and lending," Kapoor said.
"The commercial real estate sector in particular, which was 50%-plus from the regional banking system, is definitely going to be limited."
What's your economic outlook for the rest of 2023? Tweet me (@philrosenn>$4) or email me (prosen@insider.com) to let me know.
In other news:
2. US stock futures trade mixed early Thursday, following the Fed's latest rate hike. Investors will be watching key reports that will inform the Fed's next moves, including data on initial jobless claims, due later today. $4.
3. Earnings on deck: Apple, Shell, and more, all $4.
4. Meet a Baillie Gifford manager who oversees a $564 million fund. She detailed the top four investing themes she's pursuing now — $4.
5. Goldman Sachs said retail investors have "rage sold" out of the stock market. That's the group that drove the pandemic trading boom just two years ago, but analysts estimated that they've now sold twice what they acquired during that time. $4.
6. The housing market is starting to show signs of a rebound. If you look at cancellations for homes under construction, the quarterly decline is dramatic. $4.
7. Russian gold is flooding the UAE, Turkey, and Hong Kong. After wartime sanctions took hold, key Western buyers including JPMorgan stopped buying Russian bullion, so sellers have had to seek new markets. $4.
8. Real-estate wealth manager David Wieland shared a low-risk strategy that his mom-and-pop clients have used for decades to scale their portfolios. $4
9. A $1.1 trillion investment chief explained her three-part checklist for confirming a recession has started. While Nuveen Asset Management's Saira Malik is expecting a downturn to hit in the next year, she still sees opportunities for buying. $4.
10. Oil prices have declined with markets increasingly concerned about a recession. On Wednesday, West Texas crude dropped more than 4.4%, the steep declines coming the same day as the Fed's rate hike. $4.
Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn>$4 or email prosen@insider.com.
Edited by Max Adams (@maxradams>$4) in New York and Hallam Bullock (@hallam_bullock>$4) in London.