What we’re reading (5/3)
“Federal Reserve Raises Rates, Signals Potential Pause” (Wall Street Journal). “Federal Reserve officials signaled they might be done raising interest rates for now after approving another increase at their meeting that concluded Wednesday. ‘People did talk about pausing, but not so much at this meeting,’ Fed Chair Jerome Powell said at a news conference. ‘We feel like we’re getting closer or maybe even there.’”
“PacWest Falls More Than 50% After Hours On Report Bank Is Considering Strategic Options” (CNBC). “The regional bank is assessing options, including a possible sale, and bringing in advisors to evaluate longer-term plans for the business, CNBC confirmed, according to one person familiar with the matter. Piper Sandler and Stephens are the two firms advising PacWest, the person said.”
“Treasury-Market Liquidity May Not Improve Under 2024 Buyback Plan, Jefferies Says” (MarketWatch). “The U.S. Treasury’s plan for a 2024 regular buyback program to help support liquidity in the government-debt market is drawing doubts from at least one important player: investment bank Jefferies Group. Since buybacks were first discussed in late 2022, Jefferies has ‘expressed extreme skepticism that such a program would have benefits that outweigh the costs and risks,’ said U.S. economist Thomas Simons. Jefferies is one of two dozen primary dealers that act as trading counterparties of the Federal Reserve’s New York branch, and help to implement monetary policy.”
“A Look Under The Hood Of U.S. Equity Markets” (RealClear Markets). “Be careful when reading the headlines or defining true market health as measured by potentially skewed data and indexes. For the U.S. equities markets to truly enter into the next bull market we will need more than the chosen few [big tech stocks] to rally and show demand outweighs supply.”
“You’ve Heard About Behavioral Finance. But What About Physical Finance?” (Institutional Investor). “[R]esearch has begun to map behavioral finance concepts directly to specific neural pathways. For instance, loss aversion — where the psychological pain of losing is greater than the pleasure of gaining the same amount — has now been linked to activity in the ventral striatum, an area of the brain involved in processing dopamine, a neurochemical associated with rewards and pleasure. This research has shown less neural activity in this section of the brain among individuals who were less loss averse.”
