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Investing.com – After a turbulent week in which the US central bank, the Federal Reserve, erased its 6-month slashing of the balance sheet, it rose by $300 billion over the past week.
The increase comes to save the banking sector from a violent crisis. Research says that the collapse may affect about 168 US banks, despite interventions from every direction to stop the collapse.
In the aftermath of this crisis and the largest crisis in Europe, which indicates that the giant Credit Suisse bank has already failed, and the major European banks refuse to include Credit Suisse cancer, and this is what the giant UBS said, but it is now acquiescing in talks to stop the domino effect.
Investing.com’s Fed Monitor tool indicates that the Fed will hike by 25 basis points over the next week.
CNBC refers to the statements of Doug Roberts, founder and chief investment strategist at Channel Capital Research, that the Fed will be forced to take this step in order not to lose its credibility.
Predictions of major banks and experts
Goldman Sachs (NYSE:): Goldman Sachs believes that the Fed will not raise interest rates, and will be more cautious for fear of an exacerbation of the banking crisis and what it casts a heavy shadow on the markets.
Moody’s Analytics: While Moody’s analyzes believe that the Fed should immediately stop monetary tightening, the market is on the edge of the abyss and waiting for any minor event to fall, but the Fed will not care and will raise interest.
But at the same time it offers soft terms to the markets, and pushes in huge liquidity after months of monetary tightening.
Moody’s analysts believe that the Fed should not raise interest rates.
Bank of America (NYSE): While Bank of America believes that what the Fed announced on Sunday of support for banks will give the sector some flexibility.
“The recent market turmoil stemming from distress in several regional banks certainly calls for increased caution, but aggressive action by policymakers to trigger systemic risk exceptions … is likely to limit the fallout,” said economist Michael Gapin of Bank of America. “. “However, events remain volatile and further stress events could materialize between now and next Wednesday, leading the Fed to halt its rate hike cycle.”
Citigroup (NYSE:): A note by Citigroup indicates that interest rates will be raised by 25 basis points, and he believes that banks will return to fight inflation, forcing them to raise interest rates.
“I think more rationality will prevail, but it is possible that members are so focused on inflation that they have to leave the financial system to chance,” he says. “I thought we could make our way through this period without a recession, but that required some reasonably good policy by the Fed.
“If they raise rates, it’s a mistake, and I would call it a colossal mistake,” Zandi added. “The risk of a recession is going to go up dramatically at that point.”
Look at the markets
Markets were turbulent on Friday, and closed down by more than 380 points, while it rose violently to stand a few dollars away from the level of $2000 an ounce, and record a price of $1,989 an ounce.
While recession fears hit the oil market, as well as West Texas Intermediate crude, to the lowest levels in 15 months, and record the worst performance since the Corona period.
The American dollar declined by 0.55%, to 103.520.
