Goldman Sachs analysts believe that the US Federal Reserve will abandon its intention to raise interest rates again at its March meeting. The collapse of the Silicon Valley Bank (SVB) is sounding alarm bells in the economy.
It should be noted that the US authorities announced last Friday that they had closed the Silicon Valley Bank, which is a basic bank in the ecosystem of startup companies, which is closely linked to the technology sector and suddenly encounters difficulties, after entrusting the control of deposits to the agency responsible for its operations. Warranty (FDIC).
Goldman Sachs previously predicted a 25 basis point rally later this month, but analysts now expect the actions taken by regulators to provide liquidity to banks, which are currently facing large outflows of deposits, and improve confidence among investors. However, Goldman Sachs kept its forecast unchanged for increases of 25 basis points in May, June and July, and still expects a final interest rate of 5.25% to 5.5% later this year.
On the other hand, JPMorgan expects that the Fed has already taken steps to stabilize the situation, and therefore may continue to raise interest rates again. The bank still expects the Fed to raise interest rates by only 25 basis points next week.
“The Fed is to some extent responsible for the situation, as the rate hike triggered a sale of debt instruments held by banks and could be a reason to pause the rate hike cycle. However, it is important to note that the main reason behind the collapse of the SVB was poor Managing interest rate risk rather than rising interest rates per se, XTB analysts say.
This is one of the most significant bank failures in the United States since the 2008 economic and financial crisis.
It should be noted that in terms of the size of assets, the most prevalent bankruptcies were those of HBOS (UK), on September 17, 2008, of £690 billion (€762 billion), of Washington Mutual (USA), in September. 25, 2008, with assets of US$307 billion (€288 billion), now SVB, which has assets of US$209 billion (€196 billion).
Are we facing a new crisis in 2008? The collapse of the Silicon Valley bank is sounding alarm bells
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