FT News Briefing It’s all about the dollar
May 17, 2024
The US Supreme Court upholds the integrity of the Consumer Financial Protection Bureau, reinforcing consumer finance. A $10bn property fund faces liquidity issues as investors seek returns, sparking concerns in the real estate market. Meanwhile, Russia and China deepen military and economic ties amidst rising geopolitical tensions. Central banks globally are on edge, anticipating moves from the Federal Reserve on interest rates, while the strong dollar poses challenges for economies worldwide.
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Global Interest Rate Cuts
- Nine countries have cut interest rates this year, showing a global trend.
- However, everyone is watching the U.S. Federal Reserve's decision on interest rates.
Impact of High U.S. Interest Rates
- High U.S. interest rates strengthen the dollar, impacting foreign currencies like the Japanese yen and euro.
- This can lead to inflation in other economies due to more expensive imports.
Starwood's Property Fund Struggles
- Starwood's $10 billion property fund faces a liquidity crunch as investors withdraw funds after interest rate hikes.
- This situation reflects a broader struggle in the property market, with depressed valuations and cautious buyers.