Weekly Market Update - 27 March 2023

Rate Hikes

Caution reigned in markets on Thursday following the Fed’s decision to proceed with a quarter-point rate hike, combined with Treasury Secretary Janet Yellen’s remarks on the health of the banking sector. While Fed Chair Jerome Powell assured that regulators’ actions demonstrated “all depositors’ savings are safe,” Yellen said regulators aren’t looking to provide “blanket” deposit insurance. Investors in a Bloomberg News survey following the Fed decision said they’re convinced the central bank will raise borrowing costs again this year and won’t pivot to monetary easing until 2024.

Source: Bloomberg

Mobile Money

Citigroup’s Fraser said mobile apps and consumers’ ability to move millions of dollars with a few clicks of a button mark a sea change for how bankers manage and regulators respond to the risk of bank runs. “It’s a complete game changer from what we’ve seen before,” Fraser said in an interview with Carlyle Group Inc. co-founder David Rubenstein. She added that the fast demise of Silicon Valley Bank also made it difficult for banks to assess and prepare bids for its assets, and said that her firm hopes a buyer will emerge in the coming days.

Source: Bloomberg

Crypto Fugative

Terraform Labs co-founder Do Kwon, who presided over a more than $40 billion crypto implosion last year, has been arrested in Montenegro and charged with fraud by US prosecutors. The developments came just over a month after the US Securities and Exchange Commission sued the 31-year-old as well as Terraform Labs. Kwon was detained while trying to fly to Dubai using falsified traveling documents, Montenegro’s Interior Ministry said. His whereabouts have been the source of speculation since September, when authorities in his native South Korea issued a warrant for his arrest.

Source: Bloomberg