04.14.2023 | News
April Corner: A Rally Against The Odds
"The Federal Reserve has raised interest rates nine consecutive times which triggered a banking crisis and two US banks were taken over by regulators.
Meanwhile, there was a forced bank merger in Europe with Credit Suisse being consumed by UBS Group. One would think stocks would be down sharply given this backdrop, but in fact they have since rallied.
Confidence was restored for U.S. deposit holders in part by the Fed's infusion of capital through a loan facility for the banks, which served to increase liquidity on the Fed's balance sheet. This liquidity supported risk assets, allowing stocks to rally. Also fueling the rally is the drop in interest rates at the short and long ends of the yield curve."
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