Highlight of the Week
Fed Approves Quarter-Point Rate Hike, Signals More Increases Likely
- The Fed approved a 25-bps interest rate increase today bringing the target Fed funds rate to between 4.5% and 4.75%
- Fed officials indicated that “ongoing increases will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive.”
- Some investors are worried that the fall in inflation is due to the easing of supply bottlenecks and that more rate rises will be needed to further curb inflation
Auto Repossessions at the Highest Level Since the Great Recession
- 5.67% of subprime borrowers were at least 60 days late on their auto loans.
- High prices for used vehicles coupled with rising interest rates have made it hard for borrowers to keep up with payments as inflation has them prioritizing costs.
- The average auto loan rate was 8.02% in the month of December. Subprime borrowers have rates above the average.
Hindenburg Research Accuses Adani Group of Fraud
- The short seller Hindenburg Research has accused the Adani Group of stock manipulation and accounting fraud.
- This has rebooted a stalled investigation by India’s market regulators.
- The Adani group and its subsidiaries account for 5% of the total market capitalization of the Bombay Stock Exchange.
Capital One IT Layoffs
- Layoffs have spread to information technology departments as Capital One laid off 1,100 employees in its agile development group.
- Capital One’s announcement is contrary to their recent hiring activity and still have hundreds of open jobs on their website.
- This move could signal a greater trend in hiring third-party consultants to fill these roles as companies look to cut costs. Gartner estimates an 11.9% rise in spending on consulting in 2023.