The US financial system is safe and sound, according to Yellen

uk.investing.com/analysis/the-us-financial-system-is-safe-and-sound-according-to-yellen-200565924

By Federica Montella | Mar 17, 2023 12:37

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Wall Street went up yesterday

Thursday has been a positive day for the US stock market.

All three major US indexes have closed in profit.

The S&P 500 finished at +1.76%, the Nasdaq ended the trading session at +2.48% and the Dow Jones closed at +1.17%.

The positive movement has been driven by the injection of $30 billion in First Republic Bank which has reassured the investors of the worries regarding a financial crisis.

The investors' sentiment is Fear, as indicated in the graph below:

Sentiment indicator - Fear & Greed Index

The market sentiment is 26, in “Fear” mode, up from yesterday's data which was in Extreme Fear.

The US financial system is safe and sound

Yesterday, 11 of the biggest US banks deposited $30 billion to help First Republic Bank to calm down the investor's nerves about the recent bank run panic.

US banks have borrowed an overall $164.8 billion from two Federal Reserve institutions in recent days. That is a sign that the Federal Reserve has under control the financial stability.

Treasury secretary, Janet Yellen, said “I can reassure the members of the committee that our banking system is sound and that Americans can feel confident that their deposits will be there when they need them. This week’s actions demonstrate our resolute commitment to ensure that our financial system remains strong and depositors’ savings remain safe."

The latest economic data

Yesterday, the weekly US initial jobless claims has been published.

The current data is 192,000 new claims which are less than the 205,000 forecasted.

The labour market is still very strong despite the restrictive monetary policy implemented by the Federal Reserve.

Investors are expecting a 0.25% interest rate hike at the next FOMC on 22 March.

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The US financial system is safe and sound, according to Yellen

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