Financial Turmoil

According to reports, in the week before the collapse of three banks triggered global financial turmoil, deposits in the US banking industry had continued to decline. According to data released by the Federal Reserve on Friday, bank deposits decreased by $54.4 billion to $17.6 trillion in the week ended March 8. Deposits have fallen by about $500 billion from the peak set in April last year, exacerbating the pressure on the financial system. After the collapse of Silicon Valley banks and two other banks, the Federal Reserve’s weekly report on the funding situation of the US banking industry suddenly became a key data point for the market and economy. Some people worry that moving depositors’ deposits or seeking higher yield products may cause more banks to fall into trouble. Another worrying issue is that banks will tighten their lending standards while improving their financial situation, which will curb the momentum of economic growth. There have been signs of slowing credit…

According to a recent article by Nick Timiraos, the “shadow official” and mouthpiece of the Federal Reserve, more investors are currently anticipating that the Federal Reserve’s interest rate hike cycle may have ended due to the broader financial turmoil caused by the collapse of two regional banks in the United States in the past week. Michael, chief US analyst at JPMorgan Chase, said that suspending interest rate hikes now would send a false signal about the seriousness of the Fed’s efforts to address inflation issues, which could also exacerbate concerns that the Fed is hesitant to raise interest rates. On Wednesday, the market believed that the probability of the Federal Reserve reducing interest rates below 4% by the end of the year was close to 70%. Federal Reserve officials say their policies are mainly implemented by tightening the financial environment, such as rising borrowing costs, falling stock prices, and a stronger dollar. “But the effects of these policies will not…