The latest SVB news has greatly changed interest rate expectations for the Federal Reserve meeting on Wednesday. Short Term Interest Rate markets have reacted very strongly to the news pricing back into rates markets a year-end rate cut. Similarly, the STIR markets’ chance of a 25bps rate hike is now at 72% with only a 28% chance of a 50 bps rate hike. So, expectations have rapidly fallen heading into the Fed’s meeting in terms of what the Fed’s rate decision will be too. In one sense, the SVB collapse is evidence that the Fed’s tighter monetary conditions are starting to have a deeper impact on the US economy. The ... (full story)