Navigating Turbulent Markets and Leveraging Advancing Technology to Enhance the Resiliency of the Capital Markets

Amid the war in Ukraine, rising inflation, spiking commodities and the Federal Reserve boosting fees, the marketplaces are suffering from heightened volatility. Nevertheless, as a lot more exchanges leverage advancing technological innovation, the markets remain resilient all through these turbulent situations.

At the FIA Boca convention in Florida, leaders from key trade groups around the world talked about the current problems and opportunities for trade-traded marketplaces, as well as the role of their respective businesses in the coming many years. Nasdaq Govt Vice President and Head of North American Markets Tal Cohen joined this esteemed panel, highlighting how Nasdaq is leveraging the cloud to transform the funds marketplaces of tomorrow whilst also acknowledging the important macro headwinds for world-wide marketplaces.

Presently, there are several crosscurrents that the marketplaces are facing—from economics and geopolitics to desire costs, inflation and the have to have to be cyber-vigilant. Cohen also famous that the marketplaces are working with cyclical and structural challenges this yr, with a limited labor marketplace and offer chain difficulties, both equally of which are contributing to inflationary pressures. Those people pressures are then developing uncertainty around the tempo and charge of monetary coverage changes.

Importantly, the Fed raised interest rates by .25%, or 25 foundation points, marking its initial desire price increase in far more than 3 a long time. The Federal Open up Sector Committee (FOMC) also signaled 6 additional improves in the course of the rest of the year, indicating a consensus cash level of 1.9% by year’s end. On the other hand, the FOMC noted in a statement that the invasion of Ukraine by Russia is leading to “tremendous human and economic hardship,” including that the implications for the U.S. overall economy are very uncertain. 

“We are attentive to the risks of additional upward stress on inflation and inflation expectations,” Fed Chair Jerome Powell reported all through a information convention on Wednesday. “The committee is identified to consider the measures required to restore cost steadiness. The U.S. overall economy is very sturdy and well-positioned to take care of tighter financial plan.”

While Cohen mentioned that his general outlook continues to be constructive, he expects the confluence of market place-pushed variables, which includes macroeconomic and geopolitical, to proceed to drive volatility about the near term. Notably, Cohen reported that he has found substantially bigger buying and selling volumes this 12 months, and in just the last week, Nasdaq processed a new file variety of messages in a single investing day, topping the file arrived at in the course of the early onset of the coronavirus pandemic. This has only bolstered Cohen’s self-confidence in the power and resilience of Nasdaq’s enterprise.

Over the past many many years, Nasdaq actively labored to diversify its business, developing a flywheel impact involving its foundational U.S. and European marketplaces and its technology alternatives that ability additional than 100 industry infrastructure operators all-around the entire world. This transformation has proved critically important all through durations of heightened market place turbulence, enabling Nasdaq to aid asset proprietors rebalance their portfolios and take care of asset allocation conclusions, assistance banking institutions and brokers to stop monetary crime even though running amplified trader action, and empower international exchanges to take care of sector volumes and volatility.

Earlier this calendar year, Nasdaq announced a multi-year partnership with Amazon World-wide-web Products and services (AWS) to develop the subsequent technology of cloud-enabled infrastructure for capital markets. The partnership will empower the migration of Nasdaq’s North American marketplaces to the AWS cloud, commencing this calendar year with MRX, a single of Nasdaq’s U.S. solutions markets.

“What you are going to discover is that the marketplaces are heading to function improved in the future for you and for buyers,” Cohen claimed at the time of the announcement. “Nasdaq’s journey to the cloud started out roughly a 10 years in the past, and about that interval of time, we have attained working experience and comprehension of the rewards of the cloud, which include versatility, scalability, resiliency and safety.”

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