Market Overview
Last quarter began with markets still in the throes of the regional bank crisis following the March failures of Silicon Valley Bank and Signature Bank, which was followed on May 1st by the failure of First Republic Bank. Although investors feared a broader contagion in the regional banking industry, the Federal Deposit Insurance Company (FDIC)’s decision to protect the balances of all depositors of the failed banks had a calming effect. Federal Reserve policy also lent a hand in taming investors’ anxiety. Although the Fed hiked rates by another 0.25% at its May meeting, it tweaked the language in its statement to imply that it could be nearing the end of its epic rate hike campaign. (Caveat: Recent Federal Reserve Open Market Committee (FOMC) minutes, released with some delay, suggested the Fed is somewhat determined to raise rates.)
