The Federal Reserve may turn to hawks

Huitong Network2month24Daily News - From2Looking at the minutes of the monthly Federal Reserve meeting,Federal Reserve members are generally more hawkish than market expectations,The probability of the Federal Reserve raising interest rates in the near future is further increasing. If the Federal Reserve raises interest rates in the near future, it will greatly increase the cost of global bank fundraising, with major banks in Australia being the most affected.

This is because for a long time, wholesale bond funds have accounted for much more of the funds of the four major banks in Australia than European and Japanese banks, with most of them coming from outside the local Australian market.

Does the Federal Reserve raise interest rates and Australian banks suffer?

This Friday（2month24(Japanese), Federal Reserve Fund RatefuturesThe possibility of raising interest rates next month has increased to38%. Pacific Investment Management CompanyBTCapital management companies such as investment management companies have stated that after US President Trump promised to stimulate the economy through tax cuts and increased infrastructure spending, the Federal Reserve may turn to hawks, and the pace of tightening policy this year may also be faster than market predictions.

Investment research company Morningstar Company(Morningstar)Head of Credit Research AustraliaJohn LikosThe US government is preparing to fill several committee vacancies at the Federal Reserve, which could lead to a surge in interest rates. He said, "As inflation increases, long-term borrowing costs will also face upward pressure."

According to regulatory data, two-thirds of the funds of the four major banks in Australia (ANZ Group, Commonwealth Bank of Australia, National Australian Banking Corporation, and Western Pacific Banking Corporation) come from deposits, while the remaining funds come from debt markets such as the United States.

The Federal Reserve's interest rate hike will increase global financial costs, causing the Australian banking industry to suffer the most

according to2013year12According to data released by the Federal Reserve of Australia in March, there are34%From the debt market, including deposit certificates. In contrast, the proportion of German and French bank funds coming from the debt market is only20%The proportion of Japanese banks is21%. And the Fed's interest rate hike will inevitably increase the fundraising costs for these banks.

For these banks, to address the issue of increased fundraising costs, they can shift this pressure onto mortgage borrowers. In the current context of the rising real estate market, loan costs can be increased. However, none of the four banks mentioned above have responded.
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