‘The Fed is breaking things’ – Here’s what has Wall Street on edge as risks rise around the world
- Markets entered a perilous new phase in the past week, one in which statistically unusual moves across asset classes are becoming commonplace.
- Surging volatility in what are supposed to be among the safest fixed income instruments in the world could disrupt the financial system’s plumbing, according to Mark Connors, former Credit Suisse global head of risk advisory.
- That could force the Fed to prop up the Treasury market, he said. Doing so will likely force the Fed to put a halt to its quantitative tightening program ahead of schedule.
- The other worry is that the whipsawing markets will expose the weak hands among asset managers, hedge funds and other players who may have been overleveraged or took on unwise risks. Margin calls and forced liquidations could further roil markets.
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