Will the Silicon Valley Bank failure affect interest rates? Goldman Sachs’ analysts share their forecast on how bank failures will influence the Fed’s planned rate hikes. • Bank customers wonder whether to move their accounts after SVB’s failure. Chinonso Dioha reports on how big banks like Charles Schwab are reassuring investors. • The media has over-hyped projections of a booming housing market. That’s according to Wolf Richter, who covers the drop in mortgage applications.
Goldman Analysts No Longer Expect March Rate Hike After SVB Failure — U.S. regulators on Sunday said the failed Silicon Valley Bank’s (SIVB.O) customers will have access to all their deposits starting Monday and regulators set up a new facility to give banks access to emergency funds. Goldman left unchanged its expectations for 25-basis-point hikes in May, June, and July, but said it saw considerable uncertainty about the rate hike path beyond March. Read more…
Schwab Reassures Investors It Has Plenty Of Liquidity –The reassurances by the bank’s management followed reports that the bank had seen an influx of $4 billion in assets to the parent company as clients moved assets to Schwab from other banks. This is seen as a vote of confidence in the bank’s ability to weather the current economic storm. Read more…
Mortgage Applications To Purchase A Home Plunged To New 28-Year Low — Wolf Richter believes this is still a frozen housing market, based on the decrease in mortgage applications. For sales volume to rise to normal levels, prices need to come down, and by a lot, to make sense with 7% mortgages. Read more…
John R. Day, Bill Ennis, and Matt Heller