Morgan Stanley IM: Another Fine Mess: A Date with Lending Facilities and a Policy Mistake
Jim Caron, Co-Lead Global Portfolio Manager and Co-Chief Investment Officer, Global Balanced Risk Control Team, shares his macro thematic views on key market drivers.14.03.2023 | 07:57 Uhr
- The primary focus for the market is on stemming a financial crisis from stresses in the small- and mid-sized banking sector by creating lending facilities to safeguard these banks and their depositors.
- This does not seem like a GSIB - Global Systemically Important Bank - problem, but rather a small- and mid-size specialty bank issue.
- The secondary focus is trying to figure out what the Fed’s policy response might be. Do they go ahead with a 25 basis point hike next week - 50 basis points is all but off the table I would think - and then, do they intend to keep going?
- This is a good reminder that we can’t predict the future. A diversified portfolio is helpful and it’s better to be balanced - and control risk - than be defensive.