FOMC day. On 22 March the FOMC delivered a 25bps rate hike, with an accompanying statement that offered equal parts recognition of the coming tightening of credit conditions due to recent banking-sector challenges and willingness to tighten further to combat still-high inflation. Chairman Powell’s press conference demonstrated a heightened sensitivity to the challenge of combating inflation while seeking to preserve financial stability. His comments, and the Summary of Economic Projections, highlighted that the FOMC sees its rate-hiking cycle as nearly complete, but that rate cuts are unlikely until 2024. Powell appeared to have found the perfect balance as US rates and the USD fell, risky assets bounced, and cross-asset volatility retreated. In golfing terms, we might say that Powell pulled the driver out of the bag and striped one 280 yards down the middle of the fairway.

US Treasury Secretary Yellen was teeing off at the same time on the adjacent fairway and managed to shank a 3-iron dead left, nearly decapitating Powell in the process, with her comments that guaranteeing all bank deposits was not being considered. Queue more damage to regional bank shares in the US and the market pricing in 200bps of rate cuts over the next 18 months. We expect policy uncertainty and fears of a credit crunch to keep volatility elevated, and until we see a more unified policy response, we maintain our cautious stance on risky assets. The USD depreciation cycle has resumed, in our view, after a six-week consolidation.

# Regional Banks Recover From Crisis?

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  • HH浩
    ·2023-03-26
    Powell and Janet Yellen not in syn on their quest
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  • MilkTeaBro
    ·2023-03-26
    thanks for your information
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  • Taylee
    ·2023-03-26
    👍
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  • WendyK
    ·2023-03-26
    Okie
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  • 狗呆
    ·2023-03-26
    感谢
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  • 增财有道
    ·2023-03-26
    🐯
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  • Yolly08
    ·2023-03-26
    😂😂😂
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  • YKooi
    ·2023-03-26
    good
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  • BIJAYA242
    ·2023-03-26
    Nice
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  • 薇红
    ·2023-03-26
    [微笑]
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  • eveev
    ·2023-03-26
    Ok
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  • Celeste03
    ·2023-03-26
    ok
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  • CCX888
    ·2023-03-26
    good
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  • YueShan
    ·2023-03-26
    ok
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  • ngph
    ·2023-03-26
    👍
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  • pekss
    ·2023-03-26
    Ok
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  • appz
    ·2023-03-26
    [smile]
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  • moneymaker1
    ·2023-03-26
    ok
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  • Norwood33
    ·2023-03-26
    ok
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  • Twhyger
    ·2023-03-26
    [OK]
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