David Rosenberg: The Fed is signalling that a three-quarter recession will start in two weeks — via financialpost
Calling the Fed’s bluff
Seeing as the central bank is wholly data dependent, something tells me the data isn’t going to be supportive of the Fed hawks from now until then . So, even as Powell suggested this banking sector situation won’t spin out of control, the Fed is implicitly calling for a three-quarter recession starting two weeks from now. And we know the S&P 500 never ever bottoms when the recession is just getting started. Looking over the valley means seeing the whites of the eyes of the economic recovery, which will be a 2024 story best saved to be priced in by the fourth quarter of this year and not earlier.
This resulted in a five-per-cent drubbing for the KBW Nasdaq bank index, with all 21 members closing in the red. PacWest Bancorp, a California-based lender that has come under pressure alongside other regional banks, said on March 22 that it had tapped emergency cash after a 20-per-cent run on its deposits since the start of the year .
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