Daily Brief - 2 July 2024

U.S. housing market adapts to new mortgage rates

  The U.S. housing market is experiencing a shift as more homeowners move to higher mortgage rates, according to recent data from Intercontinental Exchange Inc.

Many homeowners are transitioning from lower-rate mortgages to ones above 6.5%, with a noticeable amount now at rates of 7% or higher. This change has led to a significant decrease in sub-5% mortgages compared to two years ago.

As a result, more people are selling their homes, which could make the real estate market busier. This trend might also encourage more homeowners to refinance, especially if interest rates drop later this year as anticipated.

ECB takes a cautious approach and Muller advises a waiting game on rate cuts

  Madis Muller from the European Central Bank suggests taking it slow with further interest rate cuts this year, despite possible reductions before year-end.

Speaking in Portugal, he highlighted the ongoing high inflation and wage growth as reasons for caution. Muller mentioned that while the economy is expected to improve, quick decisions on rate cuts could underestimate inflation's persistence.

The ECB aims to keep policies tight for now, carefully timing any changes to ensure stability.

BlackRock's big buy boosts Preqin's founder to new wealth heights

 BlackRock has agreed to buy Preqin, a private capital database firm, for a hefty £2.55 billion. Mark O’Hare, who founded Preqin and owns most of it, is set to earn about $2 billion from the deal, making him richer than BlackRock's Larry Fink.

The acquisition is part of BlackRock's plan to expand more into private markets. O’Hare will also become a vice chair at BlackRock, based in New York.

This move highlights BlackRock's ongoing strategy to dominate the alternatives market sector.