FT News Briefing US shifts from the ‘war on drugs’
Jan 11, 2022
The recent resignation of the Federal Reserve’s second-in-command sends ripples through financial markets. Companies are fiercely raising over $100 billion in the bond market, while Wall Street braces for record profits. In a notable shift, the U.S. is moving away from traditional drug enforcement towards harm reduction strategies. The conversation about supervised injection sites highlights the potential to save lives and the complex political landscape surrounding this reform.
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Clarida's Resignation
- Fed Vice Chair Richard Clarida resigned following disclosures about his financial market activity during the pandemic.
- This makes Clarida the third senior Fed official to resign over personal trades made during 2020's monetary policy easing.
Bond Market Surge
- Companies raised over $100 billion in the first week of 2022 on global bond markets, driven by pre-interest rate hike eagerness.
- While substantial, this trails behind last year's start; US deals hit a record pace, with banks and foreign financial institutions leading.
Record Bank Profits
- US banks are expected to report record 2021 profits due to high investment banking fees and released pandemic loan default reserves.
- Though earnings might slow in 2022, Wall Street anticipates loan-making opportunities from a rising interest rate environment.