{"id":630,"date":"2023-06-19T10:29:45","date_gmt":"2023-06-19T10:29:45","guid":{"rendered":"https:\/\/bridge419.qodeinteractive.com\/?p=630"},"modified":"2023-06-19T11:42:31","modified_gmt":"2023-06-19T11:42:31","slug":"__trashed","status":"publish","type":"post","link":"https:\/\/www.bitcapgrupe.com\/?p=630","title":{"rendered":"Markets Expect the Fed to Raise Rates Despite Banking Turmoil"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"630\" class=\"elementor elementor-630\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-c4de8d8 elementor-section-boxed elementor-section-height-default elementor-section-height-default parallax_section_no qode_elementor_container_no\" data-id=\"c4de8d8\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-dddc947\" data-id=\"dddc947\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-89435f2 elementor-widget elementor-widget-text-editor\" data-id=\"89435f2\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.18.0 - 20-12-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<h2 id=\"link-324f9dc9\" class=\"css-9ycfei eoo0vm40\">Banks in focus as the Fed weighs its rates move<\/h2><p class=\"css-at9mc1 evys1bk0\">If market predictions are correct, the Fed on Wednesday will raise borrowing costs <a class=\"css-yywogo\" title=\"\" href=\"https:\/\/www.nytimes.com\/2023\/05\/03\/business\/economy\/federal-reserve-interest-rates-may.html\" target=\"_blank\" rel=\"noopener\">by a quarter of a percentage point<\/a>, even as growing turmoil in the stocks of regional banks threatens to choke off credit to businesses and consumers, pushing the economy into recession.<\/p><p class=\"css-at9mc1 evys1bk0\"><strong class=\"css-8qgvsz ebyp5n10\">The decision comes amid a brutal sell-off in regional banks\u2019 shares,<\/strong>which has wiped billions off smaller lenders\u2019 market valuations. Investors have been worried about the health of these banks since March, when Silicon Valley Bank collapsed in one of the most prominent bank failures in U.S. history.<\/p><p class=\"css-at9mc1 evys1bk0\">Regulators had hoped that the sale of the embattled First Republic Bank to JPMorgan Chase this week would contain the panic. But short sellers, investors who profit off bets that stock prices will fall, have continued to <a class=\"css-yywogo\" title=\"\" href=\"https:\/\/www.nytimes.com\/2023\/05\/02\/business\/dealbook\/banking-crisis-first-republic.html\" target=\"_blank\" rel=\"noopener\">take aim at regional lenders<\/a> like PacWest, Western Alliance and Zions Bancorp. (Shares in PacWest and Western Alliance are down again in premarket trading.)<\/p><p><strong class=\"css-8qgvsz ebyp5n10\">The market carnage could result in more pain for regional banks.<\/strong>Falling prices may cause C.F.O.s to say, \u201c\u2018You know what, maybe I should think about diversification and moving my funding\u2019\u201d out of these lenders, Ryan Nash, a research director at Goldman Sachs, said in a webinar on Tuesday.<\/p><p class=\"css-at9mc1 evys1bk0\">He added that while \u201cmost of the large failures are likely behind us, I do think there is a risk that pressure on stock prices could reinvigorate\u201d worries about the sector\u2019s health.<\/p><p class=\"css-at9mc1 evys1bk0\"><strong class=\"css-8qgvsz ebyp5n10\">Meanwhile, the Fed faces political pressure.<\/strong> Ten progressive lawmakers, including Senators Elizabeth Warren and Bernie Sanders, urged the central bank to <a class=\"css-yywogo\" title=\"\" href=\"https:\/\/www.warren.senate.gov\/imo\/media\/doc\/Fed%20monetary%20policy%20letter_05.01.23%20FINAL1.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">pause its rate hikes<\/a> to \u201cavoid engineering a recession that destroys jobs and crushes small businesses.\u201d<\/p><p class=\"css-at9mc1 evys1bk0\">The lawmakers cautioned Jay Powell, the Fed chair, that raising borrowing prices could further compound trouble for beleaguered banks.<\/p><p class=\"css-at9mc1 evys1bk0\"><strong class=\"css-8qgvsz ebyp5n10\">None of this is likely to deter the Fed from raising rates on Wednesday,<\/strong> analysts said. Indeed, a \u201cshock pause\u201d would \u201cdo more harm than good\u201d by spooking an already jittery market, according to Elsa Lignos, the global head of FX strategy at RBC Capital Markets.<\/p><p>But economists increasingly believe that Wednesday\u2019s increase will be the last in this tightening cycle. Watch what Mr. Powell says about upcoming Fed meetings: If he suggests that the central bank needs to remain hawkish on rates to fight inflation, that could send stocks \u2014 especially those of regional banks \u2014 especially hard.<\/p><p>Ms. Lignos advised paying attention to what Mr. Powell says about whether \u201cadditional policy firming may be appropriate,\u201d a line of guidance he used after the March meeting: If that wording is softened or deleted altogether, she said, it may indicate a dovish turn by the Fed.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Banks in focus as the Fed weighs its rates move If market predictions are correct, the Fed on Wednesday will raise borrowing costs by a quarter of a percentage point, even as growing turmoil in the stocks of regional banks threatens to choke off credit&#8230;<\/p>\n","protected":false},"author":1,"featured_media":107,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[11],"tags":[16,17,18,19,20,21,22],"_links":{"self":[{"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=\/wp\/v2\/posts\/630"}],"collection":[{"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=630"}],"version-history":[{"count":6,"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=\/wp\/v2\/posts\/630\/revisions"}],"predecessor-version":[{"id":840,"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=\/wp\/v2\/posts\/630\/revisions\/840"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=\/wp\/v2\/media\/107"}],"wp:attachment":[{"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitcapgrupe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}