The Fed Kills Banks, the Aftermath and the Galactic Menagerie

Employment openings pulled back further in March, hitting a nearly two-year low in a sign that the ultra-tight U.S. job market is loosening and possibly putting less pressure on inflation, according to a report by the Labor Department. The department’s Job Openings and Labor Turnover Survey showed that job vacancies totaled 9.59 million for the month, down from 9.97 million in February and below the FactSet estimate for 9.64 million. At the same time, layoffs and discharges jumped by 248,000 to just over 1.8 million, taking the rate as a share of the workforce up to 1.2% from 1%.

In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.

They discuss a report from payroll processing firm ADP that states that private payrolls rose by 296,000 for April, above the downwardly revised 142,000 the previous month and well ahead of the estimate for 133,000.

Chris and Saied look at Fed Chair Jerome Powell's recent press conference, in which he said that, "The run on Silicon Valley Bank was out of keeping with the speed of runs through history. And that now needs to be reflected in some way in regulation and in supervision.”

They also offer some thoughts on the recent increase in the Fed's target range for its benchmark interest rate by 0.25%, while leaving its options open on future rate hikes.

Join Chris and Saied for this fascinating and informative conversation.

Enjoy!

What You’ll Learn in this Show:

• Why the entire regional bank sector is taking a significant pounding.
• Why the market doesn't believe a lot of what Fed Chair Jerome Powell is saying.
• The reason why so many knowledgeable people on the news and in social media seem to have no idea how banking works.
• The role of digital banking, providing depositors with quick access to their funds that they can move immediately.
• And so much more...

Resources:

"Dow tumbles more than 300 points as banking sector worries reignite before Fed rate decision" (CNBC)

"Job openings fell more than expected in March to lowest level in nearly two years" (CNBC)

"Private payrolls surged by 296,000 in April, much higher than expected, ADP says" (CNBC)

"Fed recap: Here are Chair Powell’s market-moving comments after the latest rate hike" (CNBC)

"Federal Reserve pushes interest rates above 5% for first time since 2007" (Yahoo! Finance)

"Exclusive: US officials assessing possible 'manipulation' on banking shares" (Reuters)

"Apple reportedly attracted $1 billion in deposits into its new high-yield savings account in just 4 days" (BusinessInsider)

"As JPMorgan Scoops Up First Republic, Are Banks Facing Their ‘Minsky Moment?'" (Payments.com)

"US job openings fall to a nearly 2-year low of 9.6 million. Fewer people are quitting too" (MarketWatch)

"For Banks Under Stress, There’s a Federal Backstop That Provides Help Without Stigma" (Bloomberg)

"Regional Bank Stocks Close at Lowest Level Since 2020" (Wall Street Journal)

"What a Fed Debate 17 Years Ago Reveals About Its Rate Deliberations Now" (Wall Street Journal)