Monthly Economic Insights - March 2023

Our March 2023 economic insights summary:

1️⃣ Banking crisis is slowly unfolding globally. Silicon Valley Bank collapsed when its customers made $142 Billion worth of withdrawal requests in just two days. And the Swiss giant, Credit Suisse collapsed after Saudi National Bank refused to give it more money.

2️⃣ The banking crisis has led the Fed to slow down rate increases. A big reason for the collapse of these banks was the decline in the value of the assets they were holding (T-bonds) after the Fed raised rates at the fastest rate in history.

3️⃣ Investors & the market thinks that the rates will be cut soon by the Fed. When rates start coming down, stocks are likely to start going up. If you have been thinking about buying some beaten down finance or tech stocks, this might be a good time to do so.

The rate cut will possibly reverse the 7-month decline in home prices in the US.

4️⃣ Consumer sentiment continues its upward ascent, after hitting its lowest point ever in Jun-2022.

5️⃣ Manufacturing sentiment is still going down and firmly indicates a shrinking economy. Overall, this means that the US economy is cooling, but still not as fast as the Fed would like because consumers are still spending money and are optimistic about the future.