The Fed's Neutralizing Effect on Fundraising

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Current conditions make it easier for these companies to raise cash. Why would that counteract the interest rate rises that the Federal Reserve has been dishing out over the past, year or so? Yeah, it does seem counterintuitive. You've had the third raising rates 11 times, the 11th time being last week. Yet we have these kind of closely watched gauges of financial conditions which actually feed into Fed policy decision making showing looser conditions than there have been in recent times. And that is sort of counter to the goal of the Fed to slow down the economy and get inflation really under control.

Rising stock prices and falling bond yields in the US have essentially neutralised the impact of the Federal Reserve’s interest rate rises, western oil and gas majors are expected to face renewed scrutiny of their energy transition plans, and China’s metals and mining investments overseas are on track to hit a record this year. Plus, the private equity owners of German sandal maker Birkenstock are considering an initial public offering of the company.

Mentioned in this podcast:

US stocks notch longest monthly winning streak in two years

Booming markets neutralise impact of rate rises on US corporate fundraising

China’s overseas investment in metals and mining set to hit record

Oil majors to face energy transition scrutiny as war profit boost fades

Birkenstock owner eyes $8bn valuation in September IPO

The FT News Briefing is produced by Fiona Symon, Sonja Hutson and Marc Filippino. Additional help from Monica Lopez, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.

Read a transcript of this episode on FT.com

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