HomeFinancial MarketsInvestors Exhibit Anxiety Over Banking, Future Fed Decisions

Investors Exhibit Anxiety Over Banking, Future Fed Decisions

Investors are exhibiting deep concerns over the instability affecting the banking sector, bracing for a potentially tumultuous few months in the stock market as banking instability and the Federal Reserve’s strict monetary policy remain at center stage.

U.S. stocks fluctuated notably this past week following the collapse of Silicon Valley Bank and Signature Bank as well as the Swiss-government-backed rescue takeover of Credit Suisse by rival UBS.

“The market is very nervous at this point and investors are acting first and looking into the nuances later,” Wei Li, global chief investment strategist at fund giant BlackRock observed. “It’s understandable because it’s not super clear that this is definitely contained.”

While JPMorgan analysts stated on Friday that they are not concerned with liquidity issues as of late, investors continue to express concern, honing in on the performance of Germany’s Deutsche Bank as of late. Deutsche bank shares plummeted by 8.5% on Friday, contributing to a loss of approximately a quarter of their value over the past month.

Observers are also troubled by the lack of uncertainty over the Federal Reserve’s monetary policy going forward. Following the Fed’s 25 basis point hike last week, it hinted that it is considering pausing further increases. Before the start of the banking sector’s turmoil, expectations were for a 50 basis point hike.

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