The macro picture has changed since the regional banking crisis, and that may make it tougher on the Fed
The economic backdrop in the US has changed since the regional bank crisis, which could make the Fed’s job harder
Photographer: David Paul Morris/BloombergLisa Abramowicz
There is one clear conclusion from the first half of 2023: March's regional banking crisis didn't become an economic crisis, as much of Wall Street expected and feared. It didn't materially seem to slow growth or appetite for risk assets. No one even talks much about regional banks these days.
And this has led to the one clear consensus for the second half of 2023: a recession looks less and less likely in the very near term. This is both good news for equity bulls and troubling news for the Federal Reserve, which may have to go further with raising interest rates to get headline US inflation back to 2%.
