It is worth noting that the failure of Silicon Valley Bank and Signature Bank were not systematic banking industry problems, but rather a result of 90% of the deposits at these banks exceeding FDIC insurance limits, and a high industry concentration to cash-demanding venture capital and crypto firms.
Historically, both the economy and the stock market experience natural, yet unpredictable, economic cycles, expanding for 8 out of 10 years and contracting for 2 out of 10. When wages and prices soar, the Fed raises interest rates to slow these down. As the Fed slows the pace of their rate hikes, we will look to lengthen the duration of our bond portfolios to lock in higher yields for longer periods of time.
On June 15th, the Federal Reserve increased the federal funds rate by 0.75% to fight inflation. This was the largest increase since 1994, and the third increase of the year. Fed Chairman Jerome Powell indicated that rates are anticipated to be increased an additional 1.75% prior to yearend.