Unlike the big shock reaction that investors and savers showed when Silicon Vally Bank went bankrupt, the market has now lost some tension. Van Oudheusden thinks so too, although he is still talking about the second largest bank failure in history. The market analyst then points to consequential damages in the real estate sector or in SME loans. ‘That remains to be seen, it is not openly discussed. SMB loans and home loans come from only those hundreds of midsize banks in America and we don’t have them all on the radar yet.’
“We must all wait for Jerome Powell’s words”
Tomorrow the US central bank will meet the Fed, everyone expects rates to rise for the last time. According to Van Oudheusden, the banking sector will extend less credit because savings continue to “keep running out” due to so high interest rates.
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As a result, commercial banks (which will extend less credit) actually do the work for the Fed. The latter, in turn, thinks it doesn’t need to tighten further. However, this can still be seen from the macroeconomic data, which are not equally positive everywhere. “We must all wait for Jerome Powell’s words.”
The ECB will also announce an interest rate decision on Thursday that will likely be along the same lines. What’s happening there, according to Van Oudheusden, is that the number of bank loans is nearly double that of the United States. “So that’s also why the ECB might be a little more reserved after all.”