TLDR
- At the upcoming Federal Open Market Committee (FOMC) meeting on March 22, a 25 basis point rate hike is the favored probability.
- A terminal fed funds rate of 5.50% with a 25bps cut at the end of the year
- The Unemployment Rate went up to 3.6% from 3.4%
- GBTC discount narrows after SEC hearing, up 7% in the past five days
- Second largest Bitcoin liquidation this year that sent Bitcoin down below $20,000
US
SVB Bank Run
SVB Financial Corp (SIVB) saw a 60% decline in share price on March 9 while seeing shares plummet a further 40% on March 10. A deposit run that led to the forced selling of assets after a tax loss of $1.8 billion. The bank is seeking over $2.25 billion, which had a knock-on effect on the banking sector as the top 4 largest banks saw $52 billion wiped out of the market cap.
This contagion spread to many other banks, including First Republic and Signature Bank, that were all halted on the exchange.
SVIB was closed by California Regulators; this was the largest bank failure since the Great Recession. It was also the 18th largest bank in the U.S. by total assets.
As a result, the 2-year treasury yield dropped 45 bps from yesterday’s high, the biggest drop since 2008.
Unemployment Rate
The unemployment rate came in slightly higher at 3.6% than the estimated 3.4%, while the U.S. economy created +311,000 jobs but was forecasted at +205,000.
Fed Funds Rate
As a result of the above, on top of Powell testifying
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Author: James Van Straten
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