Bryant Bank Market Update - March 15, 2023

Good morning, interest rates worldwide are falling quickly as Credit Suisse’s troubles further inflame fears of contagion within the global financial system.?The 2yr UST yield is firmly under 4% now, and the 1yr is quickly approaching a 3% handle as well.?Here’s where the benchmarks are trading now:

In my monthly market commentary I discussed the fact that core inflation is reaccelerating.?This morning’s news injects a fresh and potent dose of uncertainty into markets that only amplifies the problem.?If central banks pause now because of fallout in the banking system, it may be at the expense of controlling inflation.?I do not envy their position.

Fixed-income markets are moving rapidly and dramatically shifting the expectations implied through pricing.?As of this morning, those expectations are that we’ll see four 25bp rate cuts by the end of this year, ending 2023 with a Fed Funds rate of 3.75%.?Take that with a grain of salt as these implied expectations are being distorted by the speed of market movements, but it illustrates well the extent to which market sentiment is shifting.

We hope you have a great day!?Please let us know if there is anything we can be doing to better serve your needs.

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“The secret of happiness is something to do.”?--John Burroughs