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☆ The banking crisis is having a slow-burn impact on the economy
▼ + stars: | 2023-04-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

That's a credit hit on Middle America, on Main Street," said Steven Blitz, chief U.S. economist at TS Lombard. Watching growth aheadIn the immediate future, the reading on first-quarter economic growth is expected to be largely positive despite the banking problems. In fact, the most recent recession was just two years ago in the early days of the Covid crisis. Consumer spending has seemed to hold up fairly well in the face of the banking crisis, with Citigroup estimating excess savings of about $1 trillion still available. [The banking situation] is a headwind, but it's not a gale-force headwind, it's just kind of a nuisance."

Persons: Spencer Platt, Steven Blitz, Stocks, Robert Sockin, it's, Dow Jones, isn't, It's, Moody's, Mark Zandi, headwind, Covid, Jim Baird, Plante, Baird Organizations: New York Stock Exchange, Getty, JPMorgan Chase, Bank of America, TS Lombard, First, Bank, P Bank ETF, Citigroup, Commerce Department, Silicon Valley Bank, Signature Bank, Moody's, Financial Advisors Locations: New York City, U.S, America, First Republic, Atlanta

☆ Biden vows to veto the GOP bill to raise the debt ceiling if it makes it to his desk, saying it would cost Americans 780,000 jobs while stripping them of food assistance and student-debt relief
▼ + stars: | 2023-04-25 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +3 min

The White House said Biden will veto the GOP bill to raise the debt ceiling if it makes it to his desk. It's unclear if enough Republicans will sign on to support its passage through the House. Biden has repeatedly said that he will not negotiate terms to raise the debt ceiling and he would only support a bipartisan and clean increase, without any spending cuts attached. Given that 2024 is a presidential election year, that future debt limit drama may well be even more heated than the current one. With Republicans urging Democrats to negotiate raising the debt ceiling while Biden has refused, the country continues to inch closer to an economically catastrophic default, which could happen early this summer.

☆ Here’s the inflation breakdown for March 2023 — in one chart
▼ + stars: | 2023-04-12 | by ( Greg Iacurci | ) www.cnbc.com time to read: +4 min

But swings in gasoline and other energy mask price pressures that, while easing, remain under the surface, economists said. "It's improving and the economy is cooling, but it's still far from tepid," Diane Swonk, chief economist at KPMG, said of inflation. What drove inflation in March 2023Housing was a "notable" inflation driver in March and over the past year, according to the BLS. The shelter index increased 8.2% in the last year, accounting for over 60% of the total increase in consumer prices after stripping out the volatile energy and food categories. "It signals the food inflation fever has been broken," Zandi said.

☆ U.S. economy should remain 'recession-free' if consumers keep spending as they have: Moody's
▼ + stars: | 2023-04-12 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailU.S. economy should remain 'recession-free' if consumers keep spending as they have: Moody'sMark Zandi of Moody's Analytics says consumers aren't "spending with the abandon, but they're continuing to spend consistent with historical norms."

☆ There's no reason for the US to fall into recession unless the Fed messes up, Mohamed El-Erian says
▼ + stars: | 2023-04-11 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +6 min

Mohamed El-Erian said the US economy can avoid a recession unless the Fed makes another policy error. "There's no reason why we should fall into a recession other than getting another Fed policy mistake," he said. REUTERS/Jason ReedMohamed El-Erian says there's no reason for the US to tip into recession unless the Federal Reserve miscalculates what it needs to do again. "There's no reason why we should fall into a recession other than getting another Fed policy mistake," he said. Those tighter credit conditions — a credit crunch — could end up dragging on economic growth alongside Fed rate hikes.

☆ Here's why travel to Europe is no longer a 'screaming, bargain-basement' deal
▼ + stars: | 2023-04-06 | by ( Greg Iacurci | ) www.cnbc.com time to read: +4 min

Not all European countries use the euro — it's the official currency for 20 out of 27 European Union members. By the end of September, Americans could buy one euro with just 96 cents. "Europe for much of last year was a screaming, bargain-basement deal for Americans," said Mark Zandi, chief economist at Moody's Analytics. International trips account for about 56% of search demand among U.S. travelers, up from 46% last year, according to travel app Hopper's Consumer Travel Index published in February. Foreign travel for Americans is still a bargain.

☆ ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default
▼ + stars: | 2023-03-31 | by ( Matt Egan | ) edition.cnn.com time to read: +6 min

As politicians sleepwalk toward a potential debt ceiling crisis, financial markets have begun pricing in a small — but growing — chance of a disastrous default. “The probability of default has gone up noticeably,” Andy Sparks, head of portfolio management research at MSCI, told CNN in an interview. Yellen has used unusually strong language for a former central banker to warn Congress against messing with the debt ceiling. Asked about MSCI’s estimate of a 2% implied probability of a default, Valliere said that number is low. But this is not a typical debt ceiling debate.”Fallback optionsThere are some early indicators of concern popping up in the bond market.

☆ A credit crunch could worsen the bank turmoil and commercial real estate could be next domino to fall
▼ + stars: | 2023-03-27 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Odds are, commercial real estate is the next shoe to drop for the banking sector after this month's unrest. "Commercial real estate [is] widely seen as next shoe to drop as lending standards for CRE loans to tighten further," BofA's Michael Hartnett said. Regional banks have enormous exposure to commercial real estate loans. But this time around, it is commercial rather than residential real estate that may be in trouble. Are you worried about the impact of commercial real estate on the banking sector and the economy?

☆ Recessions, bank failures, and stagnant stock returns - experts see a new, difficult era dawning for markets
▼ + stars: | 2023-03-25 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +6 min

Wall Street experts see a new era ahead for markets, marked by a more difficult investing environment. Central bankers have already raised interest rates over 1,700% over the last year to quell high prices. Despite the volatility in bank stocks, Fed officials raised interest rates another 25 basis-points this week, bringing the effective Fed funds rate to 4.75-5%. That's the highest interest rates have been since 2007, and the impact of SVB's collapse is likely equivalent to another 50-75 basis points in rate hikes, Moody's chief economist Mark Zandi estimated, meaning real interest rates are even more restrictive. Some experts have argued that SVB's collapse was due to the bank's uniquely high exposure to bonds, which have been weighed down heavily by rising interest rates.

☆ The Fed is putting the economy in jeopardy by not prioritizing the stability of the banking system, Moody's chief economist says
▼ + stars: | 2023-03-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The Fed is putting the economy at risk by not prioritizing bank stability, Moody's Mark Zandi said. I think that's a pretty significant increase in interest rates, and I do think that puts the economy in jeopardy," Zandi warned. The fed funds rate is now officially targeted between 4.75-5%, after central bankers had already hiked rates 1,700% over the last year in order to control inflation. Market commentators like Paul Krugman and Bill Ackman had urged the Fed to pause or pull back its rate hiking regime altogether as worries about the banking system have spiraled. "The first priority has got to be the stability of the banking system, and of course they did not do that, and I do think they're running a risk here," he said.

☆ Fed official: People ‘hate’ inflation. That trumps bank stress and job loss
▼ + stars: | 2023-03-24 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

New York CNN —The Federal Reserve faced a particularly vexing decision this week: Should it raise interest rates during a bank crisis? But the economic reports heading into this week’s Fed meeting suggest the economy remains too hot. The Fed ultimately reached a unanimous decision to raise interest rates for the ninth meeting in a row. “The one thing that I hear loud and clear from everybody is that they hate inflation. They find inflation to be unfair,” Barkin said, referring to talking to residents in his Fed district.

☆ Housing market was already dropping into recession, says Moody's economist Mark Zandi
▼ + stars: | 2023-03-23 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailHousing market was already dropping into recession, says Moody's economist Mark ZandiMark Zandi, Moody's Analytics chief economist, joins "The Exchange" to discuss how rising rates will hit the real estate market.

☆ Elizabeth Warren demands Fed crackdown on large regional banks
▼ + stars: | 2023-03-22 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

New York CNN —Senator Elizabeth Warren is cranking up the pressure on the Federal Reserve following the collapse of Silicon Valley Bank. Both Silicon Valley Bank and Signature Bank fit into that asset threshold when they failed earlier this month. The bipartisan 2018 rollback of Dodd-Frank freed large regional banks in that range of assets from the toughest oversight. Notably, the letter was signed by Senator Angus King, the Maine independent who voted in favor of the 2018 rollback. Days after the bank failures, the Federal Reserve launched a review of the regulation and oversight of Silicon Valley Bank.

☆ CNBC Daily Open: Credit Suisse is too big to fail. So UBS agreed to buy it
▼ + stars: | 2023-03-20 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Fed officials say they rely on data to determine the trajectory of interest rates. As Doug Roberts, founder and chief investment strategist at Channel Capital Research, said, Fed officials have "to do something, otherwise they lose credibility." Subscribe here to get this report sent directly to your inbox each morning before markets open.

☆ CNBC Daily Open: UBS agrees to buy Credit Suisse
▼ + stars: | 2023-03-20 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

☆ What happens during a ‘credit crunch’ — and how you can prepare for one
▼ + stars: | 2023-03-20 | by ( Greg Iacurci | ) www.cnbc.com time to read: +5 min

But what is a credit crunch and how might you prepare? Loans would be tougher to getDuring a credit crunch, banks significantly tighten their lending standards. Banks may prioritize a healthier balance sheetA credit crunch seems likely given banking woes that have unfurled over the past two weeks. A severe credit crunch isn't a foregone conclusion, though. How to prepare for a credit crunchThere are some steps consumers can take now to prepare for a possible credit crunch.

☆ Demand for Fed help shows the banking industry is still under pressure
▼ + stars: | 2023-03-20 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

The good news: Banks were willing to go to the Fed for help, and the central bank was willing and able to comply. Programs such as the BTFP can have that stigma, too, but in this case the Fed made its conditions a bit easier than the discount window. The BTFP also pays par value on securities offered in exchange for cash, while the discount window uses market value. "The discount window takes everything. "We have seen the largest uptake of the discount window in history.

☆ Moody's Analytics' Mark Zandi says Fed unlikely to hike rates in March given banking turmoil
▼ + stars: | 2023-03-15 | by ( Sumathi Bala | ) www.cnbc.com time to read: +3 min

"I think they're going… [to] decide not to raise interest rates at the meeting next week." Inflation 'moderating'The Fed's calculation on interest rates could get complicated as the U.S. economy continues to fight high inflation. Bank downgradeOn Tuesday, Moody's Investors Service cut its view on the entire U.S. banking system from stable to negative. But he noted the move make sense in the context of higher interest rates, which could put pressure on the banking system. Still, at the fundamental level, the economist believes the U.S. banking system is in a "pretty good spot."

☆ This banking crisis is different from the 2008-2009 financial crisis in 4 ways, Moody's chief economist Zandi says
▼ + stars: | 2023-03-15 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

There are four differences between the current banking crisis and the GFC, Moody's chief economist says. Zandi's comments adds to views that the current banking crisis is different from the situation in 2008. In a series of tweets on Monday, Mark Zandi, the chief economist at Moody's Analytics, said the current banking crisis is different from the Global Financial Crisis, or GFC, in four key ways. The financial crisis, which sparked the Great Recession, was one of the worst economic downturns in US history. The economic backdrop is different this time aroundZandi also said the economic backdrop right now is very different from that of the Great Financial Crisis.

☆ U.S. Fed unlikely to raise interest rates at next meeting, says Moody's Analytics
▼ + stars: | 2023-03-15 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailU.S. Fed unlikely to raise interest rates at next meeting, says Moody's AnalyticsMark Zandi of Moody's Analytics says the U.S. Federal Reserve is probably focused on the "bank failures that roiled the banking system and markets" over the last couple of days.

☆ Can the Fed help fend off a banking crisis while also cooling the economy?
▼ + stars: | 2023-03-15 | by ( Alicia Wallace | ) edition.cnn.com time to read: +7 min

To stave off the latter, the Fed offered a solution that seemingly contradicted its hawkish flight path: looser purse-strings. That means the Fed can still fight the battle against inflation even while it shores up the banking sector. Although the Fed’s new program is an extraordinary action to ensure bank stability, the Fed is engaged in the lending business every day, Brusuelas noted. “The Fed buys and sells government securities each day to maintain the range of its policy rate — the federal funds rate — between 4.5% and 4.75%,” he said. Once that returns, the central bank can shift its focus back to restoring price stability, he said.

☆ Here’s the inflation breakdown for February — in one chart
▼ + stars: | 2023-03-14 | by ( Greg Iacurci | ) www.cnbc.com time to read: +3 min

Overall inflation has moderated from June's pandemic-era peak over 9% but remains higher than any point since the 1980s. watch now"The pervasiveness of inflation is an ongoing issue," said Greg McBride, chief financial analyst at Bankrate. Inflation a byproduct of supply, demand imbalancesConsumer prices began rising at a rapid pace in early 2021 as the U.S. economy started to reopen after the pandemic-related shutdown. Goods inflation has retreated but has since spread to the services sector largely due to business' high demand for workers, economists said. The Fed is trying to manufacture a so-called "soft landing," whereby by inflation slows but the economy doesn't tip into a recession.

☆ Fed should pause here, says economist Mark Zandi
▼ + stars: | 2023-03-14 | by ( Melissa Lee | ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFed should pause here, says economist Mark ZandiMark Zandi of Moody's Analytics with a deep dive look inside inflation. With CNBC's Melissa Lee and the Fast Money traders, Karen Finerman, Tim Seymour, Guy Adami and Courtney Garcia.

☆ Supercore inflation: Why the Fed suddenly cares about your barbershop and plumbing bills
▼ + stars: | 2023-03-13 | by ( Huileng Tan | ) www.businessinsider.com time to read: +8 min

Hence, supercore inflation equals the inflation of a basket of goods and services, minus the food and energy inflation, and minus the housing inflation. This ultra-focussed lens is what makes the set of prices in the inflation measure "supercore." supercore inflation, "may be the most important category for understanding the future evolution of core inflation," Fed Chair Jerome Powell said in November. "Traditionally, the Fed focused on core inflation because the components were deemed to be less volatile — and by extension, transitory. Not all economists think supercore inflation is all it's hyped up to beBut not all economists are convinced about the focus on supercore inflation.

☆ Takeaways from America’s second-largest bank failure
▼ + stars: | 2023-03-11 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +7 min

New York CNN —Silicon Valley Bank’s 48-hour collapse led to the second-largest failure of a financial institution in US history. Its stunning, and seemingly rapid, fall is the largest shutdown of a US bank since Washington Mutual in 2008. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”High interest rates led to its demiseTo combat rampant inflation, the central bank has been aggressively raising interest rates since 2022. When interest rates were near historical lows, the banks bought up on long-dated, seemingly low-risk Treasuries. Faced with these higher interest rates, loss of IPOs and a funding drought, SVB’s clients began pulling money out of the bank.

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