Federal Reserve Governor Randal Quarles, a former banking-industry lawyer appointed last year to oversee supervision of bank holding companies, says a rule enacted in the wake of the 2008 financial crisis to keep firms from making risky bets is "not working well."
Although BlackRock started as an investment firm primarily focused on bonds, the fixed-income business has been overshadowed in recent years by the runaway growth in index-tracking and exchange-traded funds, mostly concentrated in stocks.
A bear market in bonds? A government funding crisis? Stagnant wages and stalled-out deposit rates? These are three challenges the new Federal Reserve chair must confront after being sworn in Monday to replace Janet Yellen.
This area is set to continue to do well even if rates rise.
Investors are looking for clues on whether Trump's tax cuts will fuel enough growth to spur faster inflation, which in turn could prompt the Fed to accelerate increases in benchmark interest rates.
Citigroup CFO John Gerspach says this year's unusually low price swings in bond markets have continued into the fourth quarter, with trading profits expected to fall more than the 15% drop projected by rivals JPMorgan Chase and Bank of America.
Unusually low price swings have hurt Wall Street banks' trading profits this year, and there are few signs of a revival as the end of the end of the year approaches.
Wall Street has faced increasingly tough regulations since the financial crisis of 2008, embodied in the Dodd-Frank Act of 2010. President Donald Trump, in office for less than a year, has appointed multiple heads of financial-industry regulatory agencies who are already moving to scrap or weaken the post-crisis measures.
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