The possibility of a “technical default” by the US has been raised as the current debt limit for the US government, set by law, is expected to be hit sometime during the summer.

US bank stocks made the most significant plunge in 3 years yesterday, after Silicon Valley-based lender SVB Financial took steps to shore up its capital position, stoking concern that soaring rates are eroding balance sheets across the financial industry.

Jerome Powell spoke yesterday in the US Senate to present the Fed’s semi-annual monetary policy report. The Fed’s Chair took this opportunity to reiterate the commitment of the Fed in bringing inflation lower.

Interest rate volatility rebounded sharply last week, while U.S. Treasuries had their worst week in 2023.

All major central banks raised interest rates again, but with different magnitudes and language.

In a surprise move, the Bank of Canada (BoC), after raising its policy rate by 25 bps, announced a pause at its current level (4.5%) unless economic data surprises on the upside.

After today’s hike, The Fed Funds rate will have increased by the most amount since the six months ending March 1981.

Below are answers to our client’s most frequently asked questions on recession risk, French elections, Chinese equities, the cryptocurrencies crash and our asset allocation preferences.

Yesterday the Fed hardened the tone to signal its determination to curb inflation. At all costs? After yesterday’s 75bps hike, the market’s reaction was not dramatic but all eyes will remain on the Fed’s stance in the coming months.  

Yesterday, as expected, The Federal Reserve increased its benchmark interest rate by half a percentage point, in line with market expectations. In this note, we highlight the key facts, market reaction and share our view.