Major markets were quiet on 22 October, though the words “budget deficit” are starting to pop up more as bond yields back up.
It was the rapid rise in yields — due to interest-rate hikes from the Federal Reserve to fight inflation — that set conditions for the collapse of banks such as SVB in March 2023. Those problems haven’t gone away. Banks still had $513bn of unrealised losses on securities in the second quarter, according to the Federal Deposit Insurance Corporation.
