FT News Briefing Fed signals fewer cuts in 2024
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Sep 21, 2023 The Federal Reserve hints at another rate rise this year while signaling fewer cuts in 2024. Corporate share buybacks have plummeted to their slowest rate since the early pandemic, raising questions about market dynamics. The discussion dives into how rising interest rates are reshaping corporate financial strategies, with companies shifting focus from buybacks to dividends and real investments. Plus, there's an insightful preview of a new podcast series tackling Bidenomics and its implications for the economy.
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Fed's Future Moves
- The Federal Reserve paused interest rate hikes but signaled another rise this year.
- They also project fewer rate cuts in 2024 and 2025 than previously anticipated.
Buyback Slump
- U.S. corporate buybacks have slumped to their slowest pace since the Covid-19 pandemic began.
- This decline is driven by factors like stricter banking regulations and higher interest rates.
Impact of Buybacks
- Share buybacks increase demand for a company's stock, potentially boosting its price.
- They also improve the appearance of profits, similar to having multiple bidders for a house.