The best banks in the Asia-Pacific region, according to customers

SINGAPORE — Customers in Asia-Pacific have picked their favorite banks as lenders scramble to meet consumer expectations in a fast-changing environment.

After a prolonged period of high inflation — and interest rates — banks in the region are starting to navigate the global trend of lower rates. They’re also facing technological innovation that has the potential to transform the sector, as generative AI gains traction around the world.

Against this backdrop, CNBC and market research firm Statista surveyed 22,000 individuals with a checking or savings account in 14 major economies. The report below — the first of its kind — is designed to highlight the banks that best meet consumer needs in their respective markets.

For the survey, participants evaluated their overall satisfaction with a bank, and whether they would recommend it to others. They also rated each based on five criteria: trust, terms and conditions (such as fees and rates), customer service, digital services and quality of financial advice. Read the full methodology here. The ranking only included banks that qualified according to the criteria described in the report.

See below to see which banks made the list in your location.

Australia

1 ING Group
2 Bank Australia
3 Westpac
4 Ubank
5 NAB
6 Alex Bank
7 Newcastle Permanent Building Society
8 People’s Choice Credit Union
9 Beyond Bank
10 ME
11 Suncorp
12 MyState Bank
13 Australian Military Bank
14 Community First bank
15 Heritage Bank

Source: CNBC & Statista

Dutch bank ING came out top in Australia, against a sea of local competition. Like most economies, Australians valued trust the most and were less concerned on the financial advice they were given.

China

1 China Merchants Bank
2 Bank of China
3 ICBC
4 HSBC
5 China Construction Bank
6 Postal Savings Bank of China
7 China Minsheng Bank
8 Standard Chartered
9 SPD Bank
10 Bank of Communications
11 Agricultural Bank of China
12 UBS (China) Limited
13 JPMorgan Chase Bank (China)
14 China Everbright Bank
15 Ping An Bank
16 DBS Bank (China)
17 Bank of Suzhou
18 Bank of Jiangsu
19 Chongqing Rural Commercial Bank
20 Hang Seng Bank
21 Hubei Rural Credit Union Association
22 Huishang Bank
23 East West Bank
24 WeBank
25 Hankou Bank (HKB)

Source: CNBC & Statista

China Merchants Bank, listed in both Shanghai and Hong Kong, earned the top spot in mainland China beating both domestic and foreign players.

Hong Kong

1 China Construction Bank
2 China Minsheng Bank
3 ICBC
4 SPD Bank
5 China Everbright Bank
6 Bank of Communication
7 HSBC
8 CGB
9 Livi Bank
10 China Merchants Bank

Source: CNBC & Statista

China Construction Bank, one of China’s four major state-owned banking institutions, was ranked the top lender over foreign players like HSBC.

India

1 ICICI Bank
2 HDFC Bank
3 Axis Bank
4 Kotak Mahindra Bank
5 State Bank of India
6 HSBC
7 Paytm Payments Bank
8 Standard Chartered
9 Federal Bank
10 IndusInd Bank
11 Union Bank of India
12 Karnataka Bank
13 Punjab National Bank
14 Bank of Baroda
15 Bandhan Bank
16 Fincare
17 DSCB
18 Kerala Gramin Bank
19 Fino Payments Bank
20 APCOB
21 Punjab Gramin Bank
22 IDFC First Bank
23 UCO Bank
24 RBLBank
25 New India Bank

Source: CNBC & Statista

ICICI bank, a leading private sector bank in India, was the top pick in the country despite strong competition from mostly local lenders.

Indonesia

1 Bank Central Asia
2 Bank Mandiri
3 Sea Bank
4 Jago
5 Raya Bank
6 Bank Negara Indonesia
7 United Overseas Bank
8 PermataBank
9 Cimb Niaga
10 DBS
11 Bank Rakyat Indonesia (BRI)
12 BNC
13 Bank Muamalat
14 Jenius
15 BCA Syariah
16 HSBC
17 BDP DIY
18 Bank Aceh
19 Standard Chartered
20 Bank Sumsel Babel

Source: CNBC & Statista

Bank Central Asia, Indonesia’s largest private commercial bank, beat the competition to clinch the top spot. Customers valued both trust as well as digital services in their ranking.  

Japan

1 SBI Sumishin Net Bank
2 Rakuten Bank
3 Sony Bank
4 Aeon Bank
5 au Jibun Bank
6 PayPay Bank
7 Sumitomo Mitsui Banking Corporation
8 Senshu Ikeda Bank
9 The Juhachi-Shinwa Bank
10 Iyo Bank
11 Ehime Bank
12 Japan Post Bank
13 Ja Bank
14 Kyushu Labor Bank
15 Hamamatsu Iwata Shinkin Bank
16 Keiyo Bank
17 Bank of Fukuoka
18 Shinsei Bank
19 The Nishi-Nippon City Bank
20 Aozora Bank
21 Saitama Resona Bank
22 MUFG Bank
23 Lawson Bank
24 Gunma Bank
25 Hachijuni Bank
26 Rokin Bank
27 Kiyo Bank
28 Tokyo Star Bank
29 The Bank of Okinawa
30 Kyoto Chuo Shinkin Bank
31 Abukuma Shinkin Bank
32 North Pacific Bank
33 Ogaki Kyoritsu Bank
34 Tottori Bank
35 Bank of Kyoto

Source: CNBC & Statista

SBI Sumishin Net Bank, a Japan-based company, managed to beat other domestic lenders to come out top. Japanese citizens valued trust as their most important criteria.

Malaysia

1 Maybank
2 Standard Chartered
3 Maybank Islamic
4 HSBC
5 RHB Islamic Bank
6 Bank Islam
7 AmBank Group Islamic
8 OCBC Bank
9 United Overseas Bank
10 Hong Leong Islamic Bank

Source: CNBC & Statista

Maybank, which is the largest bank by market value in Malaysia, was the customers top pick against competition from domestic and foreign lenders.

New Zealand

1 Bank of New Zealand
2 ASB Bank
3 The Co-operative Bank
4 SBS Bank
5 Kiwibank

Source: CNBC & Statista

Bank of New Zealand, one of New Zealand’s big four banks, earned the top spot among consumers who also valued trust as the most important criteria. In some economies, like New Zealand, there are fewer competitors in the market and the size of the banking market differs, thus only five banks made the list.

Philippines

1 Philippine National Bank
2 Union Bank (Philippines)
3 Maya Bank
4 OFBank
5 UnionDigital Bank
6 UNO Digital Bank
7 GoTyme Bank
8 LANDBANK
9 Metrobank
10 BPI

Source: CNBC & Statista

Philippine National Bank, one of the largest banks in the country, earned the top rank against competition from largely local lenders.

Singapore

1 DBS
2 HSBC
3 Citibank
4 Bank of Singapore
5 United Overseas Bank

Source: CNBC & Statista

Singapore’s biggest bank DBS beat its domestic peers to clinch the top spot in the city-state. Given the small market size, there are fewer banking competitors as a result only five made the list.

South Korea

1 TossBank
2 KakaoBank
3 Kwangju Bank
4 K bank
5 Jeonbuk Bank
6 KB Kookmin Bank
7 Industrial Bank of Korea
8 DGB Daegu Bank
9 BNK Busan Bank
10 KEB Hana Bank

Source: CNBC & Statista

Toss Bank, an internet-only bank based in South Korea, managed to fend off domestic competition to emerge as top lender in the country.

Taiwan

1 E.Sun Financial
2 Bank SinoPac
3 Standard Chartered
4 CTBC Bank
5 Taipei Fubon Bank
6 Taishin International Bank
7 HSBC
8 Rakuten International Commercial Bank
9 Cathay Financial
10 Mega International Commercial Bank

Source: CNBC & Statista

Taiwan’s E.Sun Financial, headquartered in Taipei, earned the top ranking with customers focused on trust and less concerned about financial advice.

Thailand

1 Kasikornbank
2 Siam Commercial Bank
3 Bank of Ayudhya
4 United Overseas Bank
5 Krung Thai Bank

Source: CNBC & Statista

Kasikornbank bank, Thailand’s second-largest lender, came out top in the country. Only five banks made the list as there are fewer competitors and the size of banking market varies.

Vietnam

1 Techcombank
2 Vietcombank
3 BIDV
4 Military Commercial Joint Stock Bank
5 ACB
6 Vietinbank
7 VIB
8 TPBank
9 Sacombank
10 VP Bank
11 BVBank
12 Shinhan Bank
13 SeA Bank
14 HDBank
15 Ocean Bank

Source: CNBC & Statista

Vietnamese private lender Techcombank is the customers’ top pick in the country, where trust again was the key factor for survey respondents.

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Oil alliance OPEC+ could extend production cuts this weekend as focus shifts away from Middle East tensions, sources say

The OPEC logo on the building of the Organization of the Petroleum Exporting Countries.

Thomas Coex | Afp | Getty Images

The oil-producing Organization of the Petroleum Exporting Countries and its allies could extend existing output cuts this week, delegates and analysts told CNBC, even as focus shifts from Middle East tensions to summer demand.

The group, collectively known as OPEC+, was set to convene in person in Vienna on June 1, but last week moved the encounter virtually to June 2.

OPEC+ producers are currently implementing a combined 5.86 million barrels per day of supply cuts. Just 2 million barrels per day of these cuts represent unanimous commitments under OPEC group policy, and expire at the end of this year.

The remainder are reduced voluntarily by a subset of the alliance. A cut of 1.66 million per barrel is in place until the end of 2024, and 2.2 million barrels per day of supplies have been trimmed until the end of the second quarter. Market participants are watching whether this latter cut will be extended for another quarter, amid projected demand hikes.

“Come June, China would be largely out of refinery maintenance, U.S. consumption is improving as summer moves closer, so June should already see negative crude balances. And then August is the peak month for tightness,” Viktor Katona, lead crude analyst at Kpler, told CNBC.

The OPEC+ coalition is also eyeing individual members’ quota compliance, asking overproducers to implement additional cuts. Iraq and Kazakhstan have detailed compensation plans.

Extension

“I think that the clever thing for OPEC+ would be to gradually unwind the voluntary cuts to limit the upside price pressure, to prevent refilling inflation,” Jorge Leon, senior vice president of Rystad Energy’s Oil Market Research, told CNBC. “However, I think that the market right now has priced in a full extension of the voluntary cuts. So I think that is what, probably, they will do.”

He added, “If they decide to fully extend the voluntary cuts, and there is perfect compliance, and they do the full compensation, and then, if, I think prices could reach closer to $100 per barrel this summer.”

Energy security concerns fueled global inflation in the wake of Russia’s invasion of Ukraine and were further stoked after the conflict in Gaza threatened a broader spillover in the oil-rich Middle East, while frequent maritime attacks by Yemen’s Houthi militants disrupted trade transit in the Red Sea.

A high-inflation environment and tight monetary policy in turn reined in oil demand, but central banks have signaled readiness to lower interest rates in the second half of the year.

Tamas Varga, analyst at PVM Oil Associates, told CNBC that the OPEC+ supply restrictions will likely remain in place for the third quarter, adding, “I also believe that the producer group will emphasize that anyone who did not comply with the quota will have to make amends. And I believe that OPEC+ will only ease the supply constraints when they see obvious signs of global oil inventories depleting.”

Kpler’s Katona aligned with the views, but noted that heavyweights Saudi Arabia, Russia and the United Arab Emirates, who participate in the voluntary reductions, could seek to scrap the latter curbs toward the end of the year.

“Further down the line into 2025, unwinding cuts might be challenging for prices as incremental production from Guyana, Brazil, Canada will saturate the markets,” he said, flagging new Floating Production Storage and Offloading facilities due to come online. “This year there’s no new FPSO in Guyana, whilst next year it starts up a new one in [third-quarter] 2025. Brazil, likewise, has one FPSO starting up this year whilst next year it will be a bonanza of new capacity.”

S&P Global Commodity Insights: We expect OPEC+ to extend cuts through year-end

Rising competing supplies have reduced the market prominence of OPEC+, one OPEC+ delegate acknowledged, while analysts signaled that the group’s ongoing output cuts allows unfettered producers to capture their market share.

Priced in

Oil prices have largely languished range-bound in the first half of the year, under ongoing threat of spikes from developments in the Middle East. Regional escalations could top prices with a risk premium of up to $10 per barrel, Rystad’s Jorge Leon noted – while OPEC+ delegates told CNBC that the situation in the Gaza Strip is still adding a little pressure, but that the market has already absorbed the majority of its effect.

Katona likewise noted that the Gaza crisis “will seemingly persist for longer than everyone expected but it doesn’t really have an imprint on OPEC+ coherence and policy.”                     

One OPEC+ delegate meanwhile said that the unexpected death of Iranian President Ebrahim Raisi represented a tragic accident that could not be interpreted as a risk to the market, especially given that his successor will likely pursue similar politics.

“I think the geopolitical risk premium has subsided and I think that the tension between Israel and Hamas will only support prices if it will have an obvious impact on oil production or oil flows, which might come in the form of the closure of the Strait of Hormuz, or attacks on oil infrastructure in the region, something which does not look plausible at the moment,” Varga said.

OPEC+ must also balance its relationship with the U.S., which has previously blasted the coalition’s supply cuts amid concerns over gasoline prices. The Biden administration last week said it will release 1 million barrels of gasoline from reserves in a bid to curb prices at the pump. The U.S. undertook similar crude releases from its Strategic Petroleum Reserve Stocks during the Covid-19 pandemic, but one OPEC+ delegate noted such measures are unlikely to have an impact beyond price relief during the summer. The U.S. typically seeks to replenish the emergency stockpile of its state reserves.

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Berkshire Hathaway’s big mystery stock wager could be revealed soon

Warren Buffett tours the grounds at the Berkshire Hathaway Annual Shareholders Meeting in Omaha Nebraska.

David A. Grogan | CNBC

Berkshire Hathaway, led by legendary investor Warren Buffett, has been making a confidential wager on the financial industry since the third quarter of last year.

The identity of the stock — or stocks — that Berkshire has been snapping up could be revealed Saturday at the company’s annual shareholder meeting in Omaha, Nebraska.

That’s because unless Berkshire has been granted confidential treatment on the investment for a third quarter in a row, the stake will be disclosed in filings later this month. So the 93-year-old Berkshire CEO may decide to explain his rationale to the thousands of investors flocking to the gathering.

The bet, shrouded in mystery, has captivated Berkshire investors since it first appeared in disclosures late last year. At a time when Buffett has been a net seller of stocks and lamented a dearth of opportunities capable of “truly moving the needle at Berkshire,” he has apparently found something he likes — and in the financial realm no less.

That’s an area he has dialed back on in recent years over concerns about rising loan defaults. High interest rates have taken a toll on some financial players like regional U.S. banks, while making the yield on Berkshire’s cash pile in instruments like T-bills suddenly attractive.

“When you are the GOAT of investing, people are interested in what you think is good,” said Glenview Trust Co. Chief Investment Officer Bill Stone, using an acronym for greatest of all time. “What makes it even more exciting is that banks are in his circle of competence.”

Under Buffett, Berkshire has trounced the S&P 500 over nearly six decades with a 19.8% compounded annual gain, compared with the 10.2% yearly rise of the index.

Coverage note: The annual meeting will be exclusively broadcast on CNBC and livestreamed on CNBC.com. Our special coverage will begin Saturday at 9:30 a.m. ET.

Veiled bets

Berkshire requested anonymity for the trades because if the stock was known before the conglomerate finished building its position, others would plow into the stock as well, driving up the price, according to David Kass, a finance professor at the University of Maryland.

Buffett is said to control roughly 90% of Berkshire’s massive stock portfolio, leaving his deputies Todd Combs and Ted Weschler the rest, Kass said.

While investment disclosures give no clue as to what the stock could be, Stone, Kass and other Buffett watchers believe it is a multibillion-dollar wager on a financial name.

That’s because the cost basis of banks, insurers and finance stocks owned by the company jumped by $3.59 billion in the second half of last year, the only category to increase, according to separate Berkshire filings.

At the same time, Berkshire exited financial names by dumping insurers Markel and Globe Life, leading investors to estimate that the wager could be as large as $4 billion or $5 billion through the end of 2023. It’s unknown whether that bet was on one company or spread over multiple firms in an industry.

Schwab or Morgan Stanley?

If it were a classic Buffett bet — a big stake in a single company —  that stock would have to be a large one, with perhaps a $100 billion market capitalization. Holdings of at least 5% in publicly traded American companies trigger disclosure requirements.

Investors have been speculating for months about what the stock could be. Finance covers all manner of companies, from retail lenders to Wall Street brokers, payments companies and various sectors of insurance.

Charles Schwab or Morgan Stanley could fit the bill, according to James Shanahan, an Edward Jones analyst who covers banks and Berkshire Hathaway.

“Schwab was beaten down during the regional banking crisis last year, they had an issue where retail investors were trading out of cash into higher-yielding investments,” Shanahan said. “Nobody wanted to own that name last year, so Buffett could’ve bought as much as he wanted.”

Other names that have been circulated — JPMorgan Chase or BlackRock, for example, are possible, but may make less sense given valuations or business mix. Truist and other higher-quality regional banks might also fit Buffett’s parameters, as well as insurer AIG, Shanahan said, though their market capitalizations are smaller.

More from Berkshire Hathaway’s Annual Meeting

Buffett & banks

Berkshire has owned financial names for decades, and Buffett has stepped in to inject capital — and confidence — into the industry on multiple occasions.

Buffett served as CEO of a scandal-stricken Salomon Brothers in the early 1990s to help turn the company around. He pumped $5 billion into Goldman Sachs in 2008 and another $5 billion into Bank of America in 2011, ultimately becoming the latter’s largest shareholder.

But after loading up on lenders in 2018, from universal banks like JPMorgan to regional lenders like PNC Financial and U.S. Bank, he deeply pared his exposure to the sector in 2020 on concerns that the coronavirus pandemic would punish the industry.

Since then, he and his deputies have mostly avoided adding to his finance stakes, besides modest positions in Citigroup and Capital One.

‘Fear is contagious’

Last May, Buffett told shareholders to expect more turbulence in banking. He said Berkshire could deploy more capital in the industry, if needed.

“The situation in banking is very similar to what it’s always been in banking, which is that fear is contagious,” Buffett said. “Historically, sometimes the fear was justified, sometimes it wasn’t.”

Wherever he placed his bet, the move will be seen as a boost to the company, perhaps even the sector, given Buffett’s track record of identifying value.

It’s unclear how long regulators will allow Berkshire to shield its moves.

“I’m hopeful he’ll reveal the name and talk about the strategy behind it,” Shanahan said. “The SEC’s patience can wear out, at some point it’ll look like Berkshire’s getting favorable treatment.”

— CNBC’s Yun Li contributed to this report.

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First Berkshire Hathaway annual meeting without Charlie Munger: What to expect from Warren Buffett

Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024. 

David A. Grogan

When Warren Buffett kicks off Berkshire Hathaway‘s annual shareholder meeting on Saturday, the absence of Charlie Munger will be on everyone’s mind.

Some 30,000 rapt shareholders are descending on Omaha for what’s been called “Woodstock for Capitalists.” Pandemic lockdown apart, it will be the first without Munger, Buffett’s longtime partner who passed away in November about a month shy of his 100th birthday.

“The meeting will only have one comedian up there” this year, said David Kass, a finance professor at the University of Maryland and a Berkshire shareholder, who has attended more than 20 annual meetings. “There’ll be, let’s say, a more serious, less humorous background.”

The annual meeting will be exclusively broadcast on CNBC and livestreamed on CNBC.com. Our special coverage will begin Saturday at 9:30 a.m. ET. For the first time, Berkshire will broadcast its annual meeting movie that had previously always been reserved only for those in attendance in Omaha. Many speculate this year’s will be a tear-jerker tribute to Munger.

Vice Chairman of Non-Insurance Operations Greg Abel, Buffett’s designated successor, will fill Munger’s seat in the afternoon session, helping answer shareholder questions. Vice Chairman of Insurance Operations Ajit Jain will join Buffett, the CEO, and Abel in the morning session. Buffett has said they expect to field about 40 to 60 questions Saturday.

“The tone of the meeting is certainly going to be a lot different without Charlie,” said Steve Check, CEO of Check Capital Management and a longtime Berkshire shareholder. “He was the one that really made it funny. It’s getting closer and closer to the transition, so it’s good to see Ajit and Greg on the stage.”

Warren Buffett and Charlie Munger at a press conference during the Berkshire Hathaway Shareholders Meeting, April 30, 2022.

CNBC

Munger’s investment philosophy rubbed off on Buffett early on, giving rise to the sprawling conglomerate worth $860 billion that Berkshire is today. Generations of investors also appreciated Munger’s trademark bluntness and humor, rare to come by on Wall Street.

If anything, the sea of Buffett admirers will cherish his folksy wisdom even more as the “Oracle of Omaha” turns 94 in less than four months.

Here are some of the big topics shareholders want Buffett to discuss:

  • Inflation: Price pressures have proved sticky lately. What impact is inflation having on Berkshire’s businesses? Which businesses are being hurt (and helped) the most?
  • Apple: Why did Berkshire trim its Apple stake in the fourth quarter? Investors will look for Buffett’s outlook on the tech stock given its challenges in China and recent news of a giant, $110-billion stock buyback.
  • Secret stock pick: Berkshire has been buying a financial stock for two quarters straight. What is it?
  • Record cash: Does Buffett plan to put his record level of cash to work?
  • A slowdown in buybacks: With Berkshire shares outperforming this year, will Buffett continue to slow down his own buyback program?
  • Life after Buffett: More details on Berkshire’s succession plan.

Macro commentary

The annual meeting comes at a tricky time for markets as a pickup in inflation puts the brakes on the Federal Reserve’s plan to cut interest rates this year. While the Berkshire CEO doesn’t make investment decisions based on daily headlines, investors still are eager to hear any market commentary and guidance from the protege of the father of value investing, Ben Graham.

“They don’t time their investments,” Kass said of Berkshire. “The economy goes through cycles. They totally ignore cycles. They invest for a long run, and they really ignore what pretty much what the Federal Reserve is doing. I believe that will be his answer.”

Apple

Shareholders may seek an explanation as to why Berkshire sold about 10 million Apple shares (1% of its massive stake) in the fourth quarter. At the end of 2023, Berkshire owned 905,560,000 shares of the iPhone maker, worth more than $174 billion and taking up more than 40% of the portfolio.

The move came as a surprise to many because Apple has been Buffett’s favorite stock for years, and he even called the tech giant his second-most important business after Berkshire’s cluster of insurers. What’s more, the last time Buffett trimmed this bet, he admitted it was “probably a mistake.’

Shares of the iPhone maker got a big boost Friday after the firm announced that its board had authorized $110 billion in share repurchases, the largest in company history. However, Apple posted a decline in overall sales and in iPhone sales.

Secret holding

There’s a small chance that Buffett will reveal the identity of the mystery bank stock that Berkshire has been buying for two quarters straight.

In the third and fourth quarters of 2023, Berkshire requested that the Securities and Exchange Commission keep the details of one or more of its stock holdings confidential. Many speculated that the secret purchase could be a bank stock as the conglomerate’s cost basis for “banks, insurance, and finance” equity holdings jumped by around $2.37 billion.

“He will comment as late as possible…. Charlie would be the only one that would let it slip once in a while. It’s not going to happen with Warren,” Check said.

Succession

Berkshire’s succession could be front and center at this meeting after Munger’s passing. Abel, became known as Buffett’s heir apparent in 2021 after Munger inadvertently made the revelation.

Abel has been overseeing a major portion of Berkshire’s sprawling empire, including energy, railroad and retail. Buffett revealed previously that Abel’s taken on most of the responsibilities at Berkshire.

Still, some questions remain as to who will be helping allocate capital at Berkshire, and the roles of Buffett’s investing managers Ted Weschler and Todd Combs, who is also the CEO of Geico.

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Influencer Tori Dunlap is spurring women to maximize their savings and invest in the stock market

As Tiffany Mane read a personal finance book during her train ride to work, a woman sitting near her acknowledged that she, too, knew of the author. Shortly after, several bystanders began inquiring into its contents.

Mane was reading “Financial Feminist” by Tori Dunlap. The late-2022 release is one piece of the Her First $100K empire, a money-focused education platform targeted at women and other marginalized groups.

That commuting experience highlights the growing community built around Dunlap’s wisdom. And there’s a cyclical effect at play: Women utilize Dunlap’s resources to improve their financial lives, and then share the information with others.

“It really has changed my life,” said Mane, a 35-year-old human rights investigator in the Washington, D.C., area. “I realized there are so many women who don’t know this stuff and who don’t have the resources.”

Finance has historically been viewed as a man’s responsibility, creating a disparity within personal economics. New York Life found the average woman saved less than half a man did in 2022. A 2021 survey from NerdWallet showed women were less likely to be invested in the stock market than their male counterparts.

But Dunlap and her growing fanbase are looking to change that.

Dunlap herself rose to prominence by sharing her journey to save $100,000 by 25 years old. She was inspired to document this goal after finding that many existing resources didn’t adequately take into account the unique experiences of marginalized groups.

In Dunlap’s words, a lot of what was out there felt “bro-y” and out of touch with a young woman’s experience. She said society has largely characterized spending by women as “frivolous,” creating a critical culture for those seeking relatable financial advice.

“People want to feel seen and they want to feel heard,” Dunlap said. “This kind of identity-focused personal finance is 100% necessary, and is the future of personal finance.”

‘Finance is personal’

What began as a side hustle on top of a marketing job has grown to a multi-platform product since Dunlap took the leap to run Her First $100K full time in 2019. Her “Financial Feminist” book sold more than 150,000 copies in its first year in print. Dunlap’s podcast of the same name, which typically has one full and one mini episode out per week, touches on topics such as homeownership and recession planning.

Both the Instagram and TikTok accounts for Her First $100K have amassed at least 2 million followers. A Facebook group named after the book has swelled to more than 100,000 members, where Mane and others converse about issues that impact their money and careers.

In that group, members share financial wins and trade advice on topics like which banks or credit cards to use. Some ask anonymous questions as they venture into sensitive subjects such as debt or the economic reality of divorce. Members have also organized virtual book clubs with others in the group to continue the conversation.

Dunlap said she isn’t surprised that the space has become meaningful to members in a society where women are unfairly criticized for their financial choices. She’s also been proud to see a culture free of judgment or shame as participants offer one another validation and feedback.

Tori Dunlap teaching a money workshop.

Courtesy Karya Schanilec

Fans said they appreciate Dunlap’s two-fold approach to financial education. She offers actionable steps to improve their economic lives, they say, while also being cognizant of systematic barriers that make it harder for women and other marginalized groups to build wealth.

Specialized advice can benefit women, as research shows they have less confidence in topics tied to money than men, according to Annamaria Lusardi, senior fellow at the Stanford Institute for Economic Policy Research.

These niche resources would better resonate because they can touch on topics or examples that are disproportionately relevant to the specific population, said Lusardi, who is also founder of the Global Financial Literacy Excellence Center. For women, she said one area of emphasis could be on the economics of having or raising children.

“Finance is personal,” Lusardi said. “As a woman, I feel like I have different needs, have different circumstances. And so I want things more targeted to me.”

A ‘sisterhood’

For those who have engaged with Dunlap’s work and the virtual community, they’ve seen how the advice has changed their financial lives – and now feel inspired to pay it forward. In the words of Mane, the Facebook group feels like being part of a “sisterhood.”

Through Dunlap’s advice and subsequent research, Mane has implemented a plan for budgeting and opened a high-yield savings account. She also opened a Roth individual retirement account, which grows free of taxes, and she is beginning Dunlap’s educational program focused on investing called Stock Market School.

As a result, Mane, a child of immigrants who grew up below the poverty line, said she’s never felt so economically stable. Her upcoming wedding will be paid for in cash, a financial milestone she never thought would be possible.

Mane has gifted the book to several women in her life. The human rights investigator has a copy in her office for curious colleagues, often explaining what it is and has meant to her. Beyond the Facebook group, she’s started passing down tidbits of wisdom to her nieces.

Thousands of miles away, Tierney Barker is seeing parallel effects. The 32-year-old Canadian first found Her First $100K’s resources on budget tracking and debt consolidation.

One of the travel agent’s first big changes was implementing a savings “bucket” strategy — in which money is earmarked for living expenses, goals and fun. Barker has also been finding time to review her finances on a regular basis. Similar to Mane, she opened the Canadian equivalent of a high-yield savings account.

After seeing the impact on her own life, Barker recommended the book to others and requested its addition to her local library in British Columbia. Barker also found herself better equipped to discuss money with other women, something that once felt like a taboo topic that should be mostly reserved for men.

“It’s been easier to talk about it and to be open about it,” Barker said, adding that having the resources is “empowering.”

While Dunlap has been proud to see individuals benefiting from this advice and sharing it with others, she thinks that the work isn’t done.

She said the systematic barriers that disproportionately hurt women and minorities in the business world remain. After the Supreme Court’s decision to overturn Roe v. Wade, Dunlap said it’s more important than ever to push for social equity — including through economics and finance.

“I don’t believe we have any sort of equality for any marginalized group until we have financial equality,” she said. “A financial education is our best form of protest as women.”

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Banks are in limbo without a crucial lifeline. Here’s where cracks may appear next

The forces that consumed three regional lenders in March 2023 have left hundreds of smaller banks wounded, as merger activity — a key potential lifeline — has slowed to a trickle.

As the memory of last year’s regional banking crisis begins to fade, it’s easy to believe the industry is in the clear. But the high interest rates that caused the collapse of Silicon Valley Bank and its peers in 2023 are still at play.

After hiking rates 11 times through July, the Federal Reserve has yet to start cutting its benchmark. As a result, hundreds of billions of dollars of unrealized losses on low-interest bonds and loans remain buried on banks’ balance sheets. That, combined with potential losses on commercial real estate, leaves swaths of the industry vulnerable.

Of about 4,000 U.S. banks analyzed by consulting firm Klaros Group, 282 institutions have both high levels of commercial real estate exposure and large unrealized losses from the rate surge — a potentially toxic combo that may force these lenders to raise fresh capital or engage in mergers.  

The study, based on regulatory filings known as call reports, screened for two factors: Banks where commercial real estate loans made up over 300% of capital, and firms where unrealized losses on bonds and loans pushed capital levels below 4%.

Klaros declined to name the institutions in its analysis out of fear of inciting deposit runs.

But there’s only one company with more than $100 billion in assets found in this analysis, and, given the factors of the study, it’s not hard to determine: New York Community Bank, the real estate lender that avoided disaster earlier this month with a $1.1 billion capital injection from private equity investors led by ex-Treasury Secretary Steven Mnuchin.

Most of the banks deemed to be potentially challenged are community lenders with less than $10 billion in assets. Just 16 companies are in the next size bracket that includes regional banks — between $10 billion and $100 billion in assets — though they collectively hold more assets than the 265 community banks combined.

Behind the scenes, regulators have been prodding banks with confidential orders to improve capital levels and staffing, according to Klaros co-founder Brian Graham.

“If there were just 10 banks that were in trouble, they would have all been taken down and dealt with,” Graham said. “When you’ve got hundreds of banks facing these challenges, the regulators have to walk a bit of a tightrope.”

These banks need to either raise capital, likely from private equity sources as NYCB did, or merge with stronger banks, Graham said. That’s what PacWest resorted to last year; the California lender was acquired by a smaller rival after it lost deposits in the March tumult.

Banks can also choose to wait as bonds mature and roll off their balance sheets, but doing so means years of underearning rivals, essentially operating as “zombie banks” that don’t support economic growth in their communities, Graham said. That strategy also puts them at risk of being swamped by rising loan losses.

Powell’s warning

Federal Reserve Chair Jerome Powell acknowledged this month that commercial real estate losses are likely to capsize some small and medium-sized banks.

“This is a problem we’ll be working on for years more, I’m sure. There will be bank failures,” Powell told lawmakers. “We’re working with them … I think it’s manageable, is the word I would use.”

There are other signs of mounting stress among smaller banks. In 2023, 67 lenders had low levels of liquidity — meaning the cash or securities that can be quickly sold when needed — up from nine institutions in 2021, Fitch analysts said in a recent report. They ranged in size from $90 billion in assets to under $1 billion, according to Fitch.

And regulators have added more companies to their “Problem Bank List” of companies with the worst financial or operational ratings in the past year. There are 52 lenders with a combined $66.3 billion in assets on that list, 13 more than a year earlier, according to the Federal Deposit Insurance Corporation.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 7, 2024.

Brendan Mcdermid | Reuters

“The bad news is, the problems faced by the banking system haven’t magically gone away,” Graham said. “The good news is that, compared to other banking crises I’ve worked through, this isn’t a scenario where hundreds of banks are insolvent.”

‘Pressure cooker’

After the implosion of SVB last March, the second-largest U.S. bank failure at the time, followed by Signature’s failure days later and that of First Republic in May, many in the industry predicted a wave of consolidation that could help banks deal with higher funding and compliance costs.

But deals have been few and far between. There were fewer than 100 bank acquisitions announced last year, according to advisory firm Mercer Capital. The total deal value of $4.6 billion was the lowest since 1990, it found.

One big hang-up: Bank executives are uncertain that their deals will pass regulatory muster. Timelines for approval have lengthened, especially for larger banks, and regulators have killed recent deals, such as the $13.4 billion acquisition of First Horizon by Toronto-Dominion Bank.

A planned merger between Capital One and Discovery, announced in February, was promptly met with calls from some lawmakers to block the transaction.

“Banks are in this pressure cooker,” said Chris Caulfield, senior partner at consulting firm West Monroe. “Regulators are playing a bigger role in what M&A can occur, but at the same time, they’re making it much harder for banks, especially smaller ones, to be able to turn a profit.”

Despite the slow environment for deals, leaders of banks all along the size spectrum recognize the need to consider mergers, according to an investment banker at a top-three global advisory firm.

Discussion levels with bank CEOs are now the highest in his 23-year career, said the banker, who requested anonymity to speak about clients.

“Everyone’s talking, and there’s acknowledgment consolidation has to happen,” said the banker. “The industry has structurally changed from a profitability standpoint, because of regulation and with deposits now being something that won’t ever cost zero again.”

Aging CEOs

One deterrent to mergers is that bond and loan markdowns have been too deep, which would erode capital for the combined entity in a deal because losses on some portfolios have to be realized in a transaction. That has eased since late last year as bond yields dipped from 16-year highs.

That, along with recovering bank stocks, will lead to more activity this year, Sorrentino said. Other bankers said that larger deals are more likely to be announced after the U.S. presidential election, which could usher in a new set of leaders in key regulatory roles.

Easing the path for a wave of U.S. bank mergers would strengthen the system and create challengers to the megabanks, according to Mike Mayo, the veteran bank analyst and former Fed employee.

“It should be game-on for bank mergers, especially the strong buying the weak,” Mayo said. “The merger restrictions on the industry have been the equivalent of the Jamie Dimon Protection Act.”

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Powell reinforces position that the Fed is not ready to start cutting interest rates

Federal Reserve Chair Jerome Powell on Wednesday reiterated that he expects interest rates to start coming down this year, but is not ready yet to say when.

In prepared remarks for congressionally mandated appearances on Capitol Hill Wednesday and Thursday, Powell said policymakers remain attentive to the risks that inflation poses and don’t want to ease up too quickly.

“In considering any adjustments to the target range for the policy rate, we will carefully assess the incoming data, the evolving outlook, and the balance of risks,” he said. “The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

Those remarks were taken verbatim from the Federal Open Market Committee’s statement following its most recent meeting, which concluded Jan. 31.

During the question-and-answer session with House Financial Services Committee members, Powell said he needs “see a little bit more data” before moving on rates.

“We think because of the strength in the economy and the strength in the labor market and the progress we’ve made, we can approach that step carefully and thoughtfully and with greater confidence,” he said. “When we reach that confidence, the expectation is we will do so sometime this year. We can then begin dialing back that restriction on our policy.”

Stocks posted gains as Powell spoke, with the Dow Jones Industrial Average up more than 250 points heading into midday. Treasurys yields mostly moved lower as the benchmark 10-year note was off about 0.3 percentage point to 4.11%.

Rates likely at peak

In total, the speech broke no new ground on monetary policy or the Fed’s economic outlook. However, the comments indicated that officials remain concerned about not losing the progress made against inflation and will make decisions based on incoming data rather than a preset course.

“We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in the comments. “But the economic outlook is uncertain, and ongoing progress toward our 2 percent inflation objective is not assured.”

He noted again that lowering rates too quickly risks losing the battle against inflation and likely having to raise rates further, while waiting too long poses danger to economic growth.

Markets had been widely expecting the Fed to ease up aggressively following 11 interest rate hikes totaling 5.25 percentage points that spanned March 2022 to July 2023.

In recent weeks, though, those expectations have changed following multiple cautionary statements from Fed officials. The January meeting helped cement the Fed’s cautious approach, with the statement explicitly saying rate cuts aren’t coming yet despite the market’s outlook.

As things stand, futures market pricing points to the first cut coming in June, part of four reductions this year totaling a full percentage point. That’s slightly more aggressive than the Fed’s outlook in December for three cuts.

Inflation easing

Despite the resistance to move forward on cuts, Powell noted the movement the Fed has made toward its goal of 2% inflation without tipping over the labor market and broader economy.

“The economy has made considerable progress toward these objectives over the past year,” Powell said. He noted that inflation has “eased substantially” as “the risks to achieving our employment and inflation goals have been moving into better balance.”

Inflation as judged by the Fed’s preferred gauge is currently running at a 2.4% annual rate — 2.8% when stripping out food and energy in the core reading that the Fed prefers to focus on. The numbers reflect “a notable slowing from 2022 that was widespread across both goods and services prices.”

“Longer-term inflation expectations appear to have remained well anchored, as reflected by a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets,” he added.

Powell is likely to face a variety of questions during his two-day visit to Capitol Hill, which started with an appearance Wednesday before the House Financial Services Committee and concludes Thursday before the Senate Banking Committee.

Questioning largely centered around Powell’s views on inflation and rates.

Republicans on the committee also grilled Powell on the so-called Basel III Endgame revisions to bank capital requirements. Powell said he is part of a group on the Board of Governors that has “real concerns, very specific concerns” about the proposals and said the withdrawal of the plan “is a live option.” Some of the earlier market gains Wednesday faded following reports that New York Community Bank is looking to raise equity capital, raising fresh concerns about the state of midsize U.S. banks.

Though the Fed tries to stay out of politics, the presidential election year poses particular challenges.

Former President Donald Trump, the likely Republican nominee, was a fierce critic of Powell and his colleagues while in office. Some congressional Democrats, led by Sen. Elizabeth Warren of Massachusetts, have called on the Fed to reduce rates as pressure builds on lower-income families to make ends meet.

Rep. Ayanna Pressley, D-Mass., joined the Democrats in calling for lower rates. During his term, Democrats frequently criticized Trump for trying to cajole the Fed into cutting.

“Housing inflation and housing affordability [is] the No. 1 issue I’m hearing about from my constituents,” Pressley said. “Families in my district and throughout this country need relief now. I truly hope the Fed will listen to them and cut interest rates.”

Correction: Ayanna Pressley is a Democratic representative from Massachusetts. An earlier version misidentified the state.

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Pimco’s Sonali Pier lets her ‘cautious contrarianism’ speak for itself: The bets she’s making now

Sonali Pier is a portfolio manager with Pimco

Pimco’s Sonali Pier strives for outperformance.

The youngest of three and the daughter of Indian immigrants, Pier set her sights on Wall Street after graduating from Princeton University in 2003. She began her career at JPMorgan as a credit trader, a field that doesn’t have a lot of women.

“In the ladies room, I don’t bump into a lot of people,” said Pier, who moved from New York to California in 2013 to join Pimco.

Fortunately, she’s seen a lot of changes over the years. There has not only been some progress for women entering the financial business, but the culture has also changed since the financial crisis to become more inclusive, she said. Plus, it’s an industry where there is clear evidence of performance, she added.

“There’s accountability,” she said, in a recent interview. “Therefore, the gender role starts to break down a little bit. With responsibility and accountability and a number to your name, it’s very clear what your contributions are.”

Pier has risen through the ranks since joining Pimco and is now a portfolio manager within the firm’s multi-sector credit business. The 42-year-old mother of two credits mentors for helping her along the way, as well as her husband for supporting her and moving to California sight unseen. Her father also raised her to value education and hard work, Pier said.

“He was the quintessential example of the American dream,” she said. “Being able to see his hard work and a lot of progress meant that I never thought otherwise, that hard work wouldn’t lead to progress.”

Pier’s work has not gone unnoticed. Morningstar crowned her the winner of the 2021 U.S. Morningstar Award for Investing Excellence in the Rising Talent category.

“Pier’s cautious contrarianism and rising influence at one of the industry’s premier and most internally competitive fixed-income asset-management firms stands out,” Morningstar said at the time.

Putting her investment strategy to work

Pier is the lead manager on Pimco’s Diversified Income Fund, which was among the top performers in its class — ranking in the 13th percentile on a total return basis in 2023, according to Morningstar. It has a 30-day SEC yield of 5.91%, as of Jan. 31.

“We’re really broadly canvassing the global landscape, and then looking for where there’s the best opportunities,” Pier said. “It’s getting the interest rate sensitivity from investment grade, high-quality parts of EM [emerging markets], and the equity-like sensitivity from high yield and the low-quality parts of EM.”

The fund also invests in securitized assets, with about 23% of the portfolio is allocated to the sector, as of Jan. 31.

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Pimco Income Diversified Fund

While the fund has a benchmark, the Bloomberg Global Credit Hedged USD Index, it is “benchmark aware” and doesn’t “hug it,” Pier said.

Morningstar has called the fund a “standout.”

“Pimco Diversified Income’s still ample staffing, deep analytical resources, and proven approach make it a top choice for higher-yielding credit exposure,” Morningstar senior analyst Mike Mulach wrote in January.

It hasn’t always been smooth sailing. The fund has more international holdings and a more credit-risk-heavy profile than its peers, which has sometimes “knocked the portfolio off course,” like it did in 2022 during the Russia-Ukraine conflict, Mulach said. Still, he likes it over the long term.

So far this year, the fund is relatively flat on a total return basis.

In addition to also leading PDIIX, Pier is also a manager on a number of other funds, including the PIMCO Multisector Bond Active ETF (PYLD), which was launched in June 2023. It currently has a 30-day SEC yield of 5.12%, as of Tuesday, and an adjusted expense ratio of 0.55%.

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Multisector Bond Active Exchange-Traded Fund performance since its June 21, 2023 inception.

“It’s maximizing for yield, while looking for capital appreciation, and obviously, with the same Pimco principles of wanting to keep up on the upside, but manage that downside risk,” she said.

Where Pier is bullish

Right now, Pier prefers developed markets over emerging markets and the U.S. over Europe.

Within investment-grade corporate, she likes financials over non-financials. Credit spreads have widened in financials over the concerns about regional banks, she said.

“Maybe some of it’s warranted for the fact that they need to issue significant supply year after year, but we think that the metrics of, say, the big six … look quite resilient on a relative basis,” Pier said.

Within corporate credit, the team looks at the “full flexibility of the toolkit,” she noted. That could include derivatives and cash bonds, she added.

“Are we looking at the euro bond or the dollar bond in the same structure? The front end or the long end? Cash versus derivatives? However we can most efficiently express our view and trade that will lead to the best total return,” Pier said.

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February was a great month for Wall Street. These were our 5 best-performing stocks

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 23, 2024. 

Brendan McDermid | Reuters

February was a strong month for stocks and the Club’s portfolio.

The advance came as investors parsed through fourth-quarter earnings results and fresh economic data, searching for clues about when the Federal Reserve will finally cut interest rates. The Nasdaq Composite led the march higher in February, gaining 6.1% and finishing the month at its first record close since November 2021. Meanwhile, the Dow Jones Industrial Average and S&P 500 both hit a series of all-time highs throughout the month, climbing 2.2% and 5.2%, respectively.

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Fed officials expressed caution about lowering rates too quickly at last meeting, minutes show

WASHINGTON – Federal Reserve officials indicated at their last meeting that they were in no hurry to cut interest rates and expressed both optimism and caution on inflation, according to minutes from the session released Wednesday.

The discussion came as policymakers not only decided to leave their key overnight borrowing rate unchanged but also altered the post-meeting statement to indicate that no cuts would be coming until the rate-setting Federal Open Market Committee held “greater confidence” that inflation was receding.

“Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2 percent,” the minutes stated.

The meeting summary did indicate a general sense of optimism that the Fed’s policy moves had succeeded in lowering the rate of inflation, which in mid-2022 hit its highest level in more than 40 years.

However, officials noted that they wanted to see more before starting to ease policy, while saying that rate hikes are likely over.

“In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle,” the minutes stated. But, “Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent.”

Before the meeting, a string of reports showed that inflation, while still elevated, was moving back toward the Fed’s 2% target. While the minutes assessed the “solid progress” being made, the committee viewed some of that progress as “idiosyncratic” and possibly due to factors that won’t last.

Consequently, members said they will “carefully assess” incoming data to judge where inflation is heading over the longer term. Officials noted both upside and downside risks and worried about lowering rates too quickly.

Questions over how quickly to move

“Participants highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained,” the summary said.

Officials “remained concerned that elevated inflation continued to harm households, especially those with limited means to absorb higher prices,” the minutes said. “While the inflation data had indicated significant disinflation in the second half of last year, participants observed that they would be carefully assessing incoming data in judging whether inflation was moving down sustainably toward 2 percent.”

The minutes reflected an internal debate over how quickly the Fed will want to move considering the uncertainty about the outlook.

Since the Jan. 30-31 meeting, the cautionary approach has borne out as separate readings on consumer and producer prices showed inflation running hotter than expected and still well ahead of the Fed’s 2% 12-month target.

Multiple officials in recent weeks have indicated a patient approach toward loosening monetary policy. A stable economy, which grew at a 2.5% annualized pace in 2023, has encouraged FOMC members that the succession of 11 interest rate hikes implemented in 2022 and 2023 have not substantially hampered growth.

To the contrary, the U.S. labor market has continued to expand at a brisk pace, adding 353,000 nonfarm payroll positions in January. First-quarter economic data thus far is pointing to GDP growth of 2.9%, according to the Atlanta Fed.

Along with the discussion on rates, members also brought up the bond holdings on the Fed’s balance sheet. Since June 2022, the central bank has allowed more than $1.3 trillion in Treasurys and mortgage-backed securities to roll off rather than reinvesting proceeds as usual.

‘Ample level of reserves’

The minutes indicated that a more in-depth discussion will take place at the March meeting. Policymakers also indicated at the January meeting that they are likely to take a go-slow approach on a process nicknamed “quantitative tightening.” The pertinent question is how high reserve holdings will need to be to satisfy banks’ needs. The Fed characterizes the current level as “ample.”

“Some participants remarked that, given the uncertainty surrounding estimates of the ample level of reserves, slowing the pace of runoff could help smooth the transition to that level of reserves or could allow the Committee to continue balance sheet runoff for longer,” the minutes said. “In addition, a few participants noted that the process of balance sheet runoff could continue for some time even after the Committee begins to reduce the target range for the federal funds rate.”

Fed officials consider current policy to be restrictive, so the big question going forward will be how much it will need to be relaxed both to support growth and control inflation.

There is some concern that growth continues to be too fast.

The consumer price index rose 3.1% on a 12-month basis in January – 3.9% when excluding food and energy, the latter of which posted a big decline during the month. So-called sticky CPI, which weighs toward housing and other prices that don’t fluctuate as much, rose 4.6%, according to the Atlanta Fed. Producer prices increased 0.3% on a monthly basis, well above Wall Street expectations.

In an interview on CBS’ “60 Minutes” that aired just a few days after the FOMC meeting, Chair Jerome Powell said, “With the economy strong like that, we feel like we can approach the question of when to begin to reduce interest rates carefully.” He added that he is looking for “more evidence that inflation is moving sustainably down to 2%.”

Markets have since had to recalibrate their expectations for rate cuts.

Where traders in the fed funds futures market had been pricing in a near lock for a March cut, that has been pushed out to June. The expected level of cuts for the full year had been reduced to four from six. FOMC officials in December projected three.

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