Moody’s Chief Economist Warns “Things Are Going to Start to Break” Across the Financial System
The problems that currently plague banks and the financial system at large will continue for at least another year to a year and a half, warned Moody’s Analytics Chief Economic Mark Zandi, adding that “things are going to start to wobble and break” in the coming days.
Banks are so overleveraged and in the red for their derivatives shenanigans that each subsequent rate hike by the private Federal Reserve banking cartel adds that much more pressure on their books. Meanwhile, inflation is still soaring because in order to really get a hold on it, interest rates would need to be hiked a whole lot more.
But doing that will sink the system, so the Fed is stuck between a rock and a hard place. One thing is for sure: they are going to try to do whatever it takes to prevent the big boys from losing and the little guys from winning, which typically means more financial pain for everyone at the grocery store and the gas pump.
“When you raise interest rates and you raise them as fast as the Fed has and as high as they have over the past year, things are going to start to wobble and break and it’s going to feel uncomfortable,” were Zandi’s exact words when asked by CBS News host John Dickerson about remarks that Fed Chairman Jerome Powell made concerning a “bumpy” ride for the banking industry as interest rates increase.
Yellen Warns Next Crisis Could Come From ‘Shadow Banks’ and Regulators Must Act
Treasury Secretary Janet Yellen on Thursday said banking rules may need to be tightened after the recent failures of Silicon Valley Bank (SVB) and Signature Bank, while warning of structural vulnerabilities that must be addressed in the “shadow bank” sector that includes things like hedge funds and money market funds.
In remarks prepared for delivery to the National Association for Business Economics (NABE), Yellen said that banking regulation and supervisory rules need to be reexamined in the wake of the twin collapses of SVB and Signature, which were sparked by bank runs.
“Anytime a bank fails, it is cause for serious concern. Regulatory requirements have been loosened in recent years. I believe it is appropriate to assess the impact of these deregulatory decisions and take any necessary actions in response,” Yellen said.