Receiving Wide Coverage ...
Reactions to Fed: The Federal Reserve opted not to raise short-term interest rates at its two-day policy meeting, putting an end to weeks of speculation — and setting off a rash of think pieces and retorts, naturally. The Wall Street Journal delves into banks' disappointment, noting that Bank of America and U.S. Bancorp plan to look for ways to cut costs further to make up for the continued low-interest-rate environment. American Banker also reported Thursday that banks may start shifting their balance sheets toward longer assets that are less sensitive to interest rates.
Taking a broader look at the story, the Journal says the Fed's caution mirrors the personality of central bank chair Janet Yellen, who's known for "liking to arrive at airports hours before departure and preparing weeks in advance for big speeches, reflections of a desire to avoid unnecessary surprises." Justin Lahart of "Heard on the Street" remarks that Fed officials appear to have been fairly united behind the decision to hold off raising rates, perhaps because both hawks and doves recognize the difficulty of meeting the central bank's 2% inflation target. The New York Times shares this interpretation of the mood at the Fed, writing analysts were surprised by the exceedingly dovish tone of the rate-setting committee's statement.
Over at the Financial Times, Mohamed El-Elrian recommends the Fed get a grip on jumpy markets ahead of its next policy meeting. The central bank should encourage markets to stop "obsessing over the timing of the first hike" and focus on "the entirety of an unusually 'accommodative' interest rate cycle," he says.
Keeping Apple in Line: HSBC chairman Douglas Flint says tech companies like Apple and Alibaba should steel themselves for greater regulation as they venture into financial services. "Regulators all around the world are reflecting on the extent to which Internet companies are conducting banking business and at which point they should be licensed as banks, or whether they are simply providing a payment mechanism or some kind of application that facilitates access to banking," Flint said in a speech Thursday. Of course, there's a self-serving element to Flint's speculation: he suggests tech firms might as well just buddy up with banks in order to avoid all that regulatory hassle. Financial Times, Reuters
Wall Street Journal
In an op-ed, JPMorgan Chase chief Jamie Dimon argues leaders in Washington, D.C., should follow Detroit's bipartisan approach to dealing with national issues. Some of Dimon's recommendations for reform clearly fall on the conservative end of the political spectrum. He protests "entitlement spending" and suggests high corporate taxes are driving American business overseas. His opinions on immigration reform appear more politically mixed, as he argues the country needs to "properly protect" its borders but should also offer "a true path to citizenship for law-abiding, undocumented immigrants."
Market volatility is normally a boon for banks' trading revenue, but Citigroup and Bank of America are predicting declines in the third quarter.
Here's the last segment of the paper's five-part series on former trader Tom Hayes, the man at the center of the Libor rate-rigging scandal.
The paper offers an explainer on bank lending to oil and gas companies, which is expected to tighten in response to rock-bottom oil prices.
"Mattress cash is back," declares Martin Sandbu. He argues while people are making purchases with physical money less frequently, people around the world still want to hang onto it in case of emergency.
New York Times
"Builders broke ground on fewer houses and apartment complexes in August, a possible sign that the housing market may be leveling off after accelerating for much of the year," according to the latest data from the Commerce Department. EverBank's executive vice president of home lending Tom Wind doesn't sound too worried. "This is a mere blip on the radar," he said.