March Moves

The March Y-o-Y Core CPI reading of 5.6%, up from 5.5% gives the Fed permission to raise Fed fund by 25bps on 5-3-23. But the hikes end there. Banking is struggling. System-wide deposits collapsed at a 30% annualized rate in March, resulting in outstanding credit contracting 3.4%. And while equities are holding up, cyclical sectors like real estate, banks, transportation, and consumer discretionary, are collectively 32% off their peaks.

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