5 min to know your way around

The Fed has officially started the process of reducing its balance sheet, raised its key rates by 50 bps and pre-announced two more 50 bps rate hikes... but is voluntarily vague for the future because it probably does not want to damage credit markets too much.    

While there are more clouds for the growth outlook and that the upside risks for inflation have intensified, the ECB confirms that it wants to normalize its monetary policy. Indeed, governors are worried about a possible de-anchoring of inflation expectations.  

At this committee, the Fed raised its key rates for the first time since 2018 and since the covid 19 epidemic. But most of all, Jerome Powell confessed for the first time that the Fed was late in normalization cycle.       

In a complicated context (war in Ukraine and sharp rise in energy prices), the ECB confirms the normalization of its monetary policy by announcing that it will purchase less assets in Q2 and that it could even stop these purchases in Q3.

Christine Lagarde explains that the ECB now considers that the risks to the inflation outlook are titled to the upside and that it could tighten its monetary policy as soon as 2022.

The Fed says it will not get cold feet. The first rate hike should take place in March. The schedule for the balance sheet reduction gets clearer.       

The French Prudential Supervision and Resolution Authority (ACPR) and the Paris financial center demonstrate their mobilization in the fight against climate change through the implementation of stress tests aimed at emphasizing the importance for financial institutions and supervisors to amplify and accelerate their actions in response to the climate emergency.  

What is the the scope of the SFDR (“Sustainable Finance Disclosure Regulation”)?  What is at stake for CPR AM and more generally for asset management companies?Answers by Catherine Crozat, Head of ESG Project at CPR AM