In today’s briefing:
- FTC Under Lina Khan Is Armed with Shrewd Regulatory Arsenal Against Anti-Competitive M&A Deals
- Thinking About, Thinking About Central Banks … And Liquidity
- Fed Policy Pivot: Forerunner to Further Capitulation in the Great Game of Chicken?
FTC Under Lina Khan Is Armed with Shrewd Regulatory Arsenal Against Anti-Competitive M&A Deals
- The Federal Trust Commission (FTC) and Department of Justice (DoJ) issued new guidelines for mergers and acquisitions addressing modern market realities.
- Guidelines are aimed at preventing large corporations in highly concentrated markets from acquiring current and/or potential competitors with a view to monopolising their industries.
- The new guidelines give regulators better ammunition to scrutinise vertical and cross mergers, giving them much needed “teeth” to challenge “clever” M&A transactions.
Thinking About, Thinking About Central Banks … And Liquidity
- Global Liquidity cycle is rising and set to hit a peak sometime around late-2025. This is bullish for risk assets
- The timing of the recovery from October 2022 aligns with past cycles, but its scale is far less. Things need to speed up.
- The US Fed has been a key culprit in keeping liquidity conditions too tight for too long. 2024 will see a significant ease from US policy-makers
Fed Policy Pivot: Forerunner to Further Capitulation in the Great Game of Chicken?
- The faster-than-expected decline in inflation in 2023 has forced the Fed to lower real interest rates next year, partly due its assessment of the neutral level remaining unchanged at 0.5%.
- History suggests that Fed policy pivots followed by a rapid succession of interest rate reductions have not prevented recessions. US equity and bond investors are still embracing a soft-landing outcome.
- By capitulating to the demands of financial markets to pivot its policy stance, the Fed faces the risk of encountering more pressure to ease further at a later juncture.
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