tl;dr
The Federal Deposit Insurance Corporation (FDIC) reported $517 billion in unrealized losses in the US banking system, with 63 banks at risk of insolvency. This has raised concerns about the stability of the US economy and financial sector. The ISM Manufacturing PMI came in at 48.7, below forecasts, ...
Financial News Summary The Federal Deposit Insurance Corporation (FDIC) reported $517 billion in unrealized losses in the US banking system, with 63 banks at risk of insolvency. This has raised concerns about the stability of the US economy and financial sector.
The ISM Manufacturing PMI came in at 48.7, below forecasts, indicating a larger-than-expected contraction in manufacturing. As a result, the price of Bitcoin surpassed $70,000, as weaker manufacturing data increases the likelihood of interest rate cuts by the U.S. Federal Reserve.
The higher interest rates and delays in rate cuts have caused banks and businesses in the U.S. to remain under extreme pressure. The FDIC stated that the US banking system is at high risk of insolvency as 63 banks have $517 billion in unrealized losses in Q1 2024. Rising concerns can shake the stability of the financial sector and the broader economy.
Bitcoin price and the crypto market are likely to witness strong upside momentum due to possible bank runs. The recent CPI and PCE data showed that inflation is gradually cooling and the ISM Manufacturing PMI has slowed, pushing the Fed to announce rate cuts soon.
Currently, Fed swaps signal a single rate cut this year, but favorable data in coming months can bring a full pivot of the Fed monetary policy as early as September. The US dollar index (DXY) has dropped recently to under 105 amid cooling inflation and labor market, with a low of 104.1 at the time of writing.