And if you watched the CNBC video, you'll notice that stocks also ticked up a bit after thre Fed's decision and Chairman Powell's press conference, as they figured things were steady enough, and only one more rate hike was priced in. But then something else happened after Powell spoke.
Federal Reserve 'dot plot' shows interest rates peaking at 5.1% in 2023 https://t.co/V71uSfx9kf— Yahoo Finance (@YahooFinance) March 22, 2023
by @alliecanal8193 pic.twitter.com/OkQQXkfp4o
And that something came in statements US Treasury Secretary Janet Yellen gave to a Senate committee, indicating that the Biden Administration would not bail out all bank depositors on their alone.
Dow Jones fell down 500+ points in the last one hour trading session. pic.twitter.com/jsSRNdXCGS— Asif Momin (@Asifmominblr) March 22, 2023
Some banking groups have urged the Biden administration and the Federal Deposit Insurance Corp (FDIC) to temporarily guarantee all U.S. bank deposits, a move they say will help quell a crisis of confidence after the failure of Silicon Valley Bank and Signature Bank. Reuters reported on Tuesday that government officials discussed the idea of raising the $250,000 insurance limit per depositor without congressional approval following the SVB and Signature closures. Yellen said she believed it was "worthwhile" for Congress to look at changes to FDIC deposit insurance, but declined to say what changes she thought were warranted. But when asked whether insuring all U.S. deposits required congressional approval, Yellen said she was not considering such a move and was reviewing banking risks on a case-by-case basis. "I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits," she said.And Wall Street threw a tantrum, causing the big losses. For the record, I think that the $250,000 limits of FDIC insurance are probably outdated, and I think it would be a great idea for Congress to raise the fees banks pay to the Treasury in order to raise those limits. Which seems to be what they are going to try to do.
Senate Banking Committee chair @SenSherrodBrown says prospects are improving for legislation lifting the Federal Deposit Insurance Corp. cap, as senators discuss ideas ahead of a hearing on the failures of Silicon Valley Bank and Signature Bank. https://t.co/oNuab5JtUt— Scott Suttell (@ssuttell) March 22, 2023
"There seems to be more commonality about what to do with FDIC than there was four or five days ago," the Cleveland Democrat told reporters Tuesday evening, March 21. "By our hearing next week, we may have some clarifying thoughts that there can be some consensus." The Banking Committee is scheduled to hear from FDIC chair Martin Gruenberg, Fed vice chair for supervision Michael Barr and Nellie Liang, the Treasury undersecretary for domestic finance..... "We'll examine deposit insurance coverage issues. We'll look at the role of social media. We'll consider legislation to strengthen guardrails and I'll continue pressing regulators to do a full review of those two bank failures and what is happening across the country," Brown said. "I think we could find some bipartisan solutions, perhaps on FDIC changes." Brown said Tuesday that proposals include raising the insurance cap, eliminating the cap permanently or temporarily, and creating a different insurance category for businesses. The brunt of any additional costs would have to be paid for "by the big guys," Brown said, meaning larger banks and larger depositors.But Wall Streeters want their bailout now, dammit! And to keep their low-rate coacine party as soon as they can. While I also think rates are too high, my reasons are because the Fed shouldn't stop what's a very good economy in the real America, and inflation has been on the wane for 8 months, to the point that real short-term rates are very high these days. I would hope the Fed goes on pause with its next meeting in May, particularly as oil prices have fallen to their lowest levels since 2021, and as food prices are finally moderating. To me, it's more important to keep the strong jobs market rolling along than in caring whether inflation is at 2% or 4%. Especially when interest rates are now at 5%
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