Goldman Sachs rules out further rate hikes in March

Goldman had previously expected a 25 basis point hike in March.

“Given the strains in the banking system, we do not expect the Fed to raise rates at its next meeting,” Goldman economist John Hutchius said in a note on Sunday.

US authorities have announced they will guarantee the withdrawal of all deposits from SVB and allow access to all deposits from another firm, Signature Bank, which was automatically shut down by the US regulator.

In addition, the Federal Reserve has promised to lend other banks the funds they need.

Goldman analysts said they expect the measures taken by regulators to provide substantial liquidity to banks facing deposit withdrawals and improve customer confidence.

Other analysts also believe that SVB’s bankruptcy reflects the breakdown of the US banking system, and that rising interest rates in the US have prompted customers to put their money into financial products. Better wages than current accounts, thus leading to the drying up of an important source of new technology.

This wave of bank withdrawals sounded the death knell for three banks last week: SVB, Signature Bank but also Silvergate Bank, smaller but known for its privileged links to the cryptocurrency community.

Reacting to SVB’s bankruptcy, President Joe Biden sought reassurance on Monday, stressing the “solidity” of the US banking system.

“Your deposits are available when you need them,” he said from the White House. He also promised that American taxpayers would not be held responsible for losses caused by bank failures, and called on Congress to “strengthen” regulation of the sector.