Financial Risk

In Q4/2022, global FX markets were costly for North American companies, but less so than in Q3/2022.

Economists now expect the federal funds rate to peak at 5.25%, vs. the 5% they expected just last month.

Large Wall Street dealers already stand to lose $5 million to $10 million if the spread between overnight and term SOFR moves against them by just 1 basis point, and their exposure grows with every new transaction.

Minutes from the FOMC's December meeting include an unusually blunt warning to investors, cautioning against underestimating the Fed's will to keep interest rates high for some time.

Only the Japanese yen has proved stronger than the greenback among G-10 currencies so far this year, with the Norwegian krone, euro, and Swiss franc falling sharply.

Congratulations to Bristol Myers Squibb and Medtronic!

Congratulations to Medtronic for winning the 2022 Silver Alexander Hamilton Award in Risk Management!

Treasury teams should be reconsidering aspects of their financial risk management programs in light of 2022's dramatic increase in dollar strength.