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Powell vows no hesitation.

Protesters interrupt a speech by Jerome Powell, chair of the US Federal Reserve, left, during the 24th Jacques Polak Annual Research Conference in Washington, DC on Thursday, Nov. 9, 2023. Photo: Ting Shen | Bloomberg

Federal Reserve Chair Jerome Powell said the US central bank won’t hesitate to tighten policy further if appropriate and reiterated that the central bank isn’t fully confident it has tightened enough to return inflation to 2%. The central bank will move carefully, he told an audience at the International Monetary Fund in Washington, to avoid the risk of overtightening. Shortly after he began to speak, Powell was ushered from the room as a group of environmental protesters jumped onto the stage with a banner. 

Stocks fizzle: The rally in stocks sputtered on Thursday as Europe’s Stoxx 600 index slipped 0.3% and US equity futures traded flat. Oil hovered near a three-month low after plunging almost 7% over the previous two sessions. Yields on 10-year Treasuries held below 4.5%.

Wall Street warns of risks in push to rein in home-loan banks

A push by US regulators to rein in the Federal Home Loan Banks risks casting broad ripples through the US financial system, increasing costs to banks by pulling a major force from the nation’s funding markets. That’s a key takeaway from Wall Street strategists after the Federal Housing Finance Agency released a report this week that called for limiting access to loans from the banks. (Bloomberg Markets | Nov 9)

Falling Treasury yields could turn Fed hawkish if financial conditions ease

Falling Treasury yields helped launch an explosive rebound in stocks and lifted US government bonds from 16-year lows. Now some investors worry that further declines in yields could keep the Federal Reserve in a hawkish stance for longer, potentially hurting asset prices over the longer term. (Reuters | Nov 9)

Endangered FX funds double their returns thanks to carry trades

For more than a decade, running a foreign exchange fund meant having to defend lackluster returns and worrying about the imminent threat of closure. But this year, long-suffering currency investors are getting a lifeline from global central banks pursuing policies that are aggressive, disjointed — and perfect for those who make money from exploiting gaps in interest rates from one nation to another. (Bloomberg Markets | Nov 8)

UBS chair spars with private equity chiefs over risks of ‘shadow’ banking

The next financial crisis is likely to be in the “shadow” non-bank lending sector, UBS chair Colm Kelleher has warned, saying that the growth of lightly regulated private markets since the 2008 crisis is a “real cause for concern.” Speaking at a finance conference in Hong Kong on Tuesday, Kelleher said he was making the remarks “at the risk of upsetting half the people in the room, some of whom are clients and competitors.” (Financial Times | Nov 7)

Money market funds spring a leak after year of record inflows

A sharp rise in interest rates has cranked up mortgage payments for consumers and escalated borrowing costs for companies around the world over the past 19 months. But it has also lifted the available yields on money market funds to their highest level in years — prompting investors to pour a record $1 trillion into the asset class since January. (Financial Times | Nov 6)

‘Attack everything’: Russia-linked hackers claim they knocked OpenAI offline this week. Photo: Florence Lo | Reuters

OpenAI confirms DDoS attacks behind ongoing ChatGPT outages

OpenAI has been addressing "periodic outages" due to DDoS attacks targeting its API and ChatGPT services within the last 24 hours. Russia-linked hackers Anonymous Sudan claimed responsibility for the attacks, saying it targeted the Microsoft-backed startup because it explored investment opportunities in Israel.

— Bleeping Computer

Cybersecurity issue impacts Treasury market

A cyber attack on one of the firms that clears Treasury trades — the Industrial and Commercial Bank of China — affected trading of US bonds on Thursday. Traders said Treasury market liquidity, a measure of how easy or difficult it is to trade in and out of positions, was impacted. Treasury yields climbed in morning trading then jumped higher after weak demand for a 30-year bond auction spooked investors, signaling bonds were affected by the government's debt sale rather than the ICBC issue.

— The Wall Street Journal

SolarWinds claps back at federal cyber charges over 2020 hack

SolarWinds Corp. accused the US Securities and Exchange Commission of “twisting the facts” in the government’s lawsuit alleging the software company misled investors about its cybersecurity posture before and after its flagship product was targeted by supposed Russian hackers. The agency’s complaint mischaracterized steps SolarWinds took to assess and publicly report the security risks it faced as part of an effort to extend its regulatory reach over cybersecurity matters.

— Bloomberg Law

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Swiss rules required the country’s two big banks, Credit Suisse and UBS, to hold extra capital beyond the international standards. Photo: Michael Buholzer | Keystone | Associated Press

How a banking capital of the world botched its own banking rules

Switzerland wanted its big banks to be fortresses. In practice, the country’s “too big to fail” banking laws made a sand castle of Credit Suisse. The Swiss rules in question have become an object lesson in the difficulties of designing financial regulation. Created to prevent a repeat of the 2008 financial crisis bailouts, Switzerland’s customized version of international capital requirements laid the groundwork for the biggest bank rescue since.

— The Wall Street Journal

People no longer know how much to tip

Tipping can be seen as an obligation or a choice — and, a new study shows, the answer often varies by generation. Younger people are more likely to tip by default, while older consumers tend to say it is a personal decision. Our attitudes about when and how much to tip have been reshaped by all the screens prompting us for gratuities at cafes and other businesses.

— The Wall Street Journal

Bored Ape Yacht Club had a rough weekend

You’d be forgiven if you were under the impression that the nonfungible token market had vanished off the face of the internet, another casualty of last year's cryptocurrency chaos. While trading volumes have slowed to a tiny trickle compared with what they were in their heyday, don’t write that obituary for the cartoon-jpeg asset class just yet. This past weekend, there were developments that proved the NFT space is alive, and... actually “well” may be too strong of a word, so let’s leave it at “alive.”

— Bloomberg Crypto