CNBC MORNING SQUAWK1. Powell looms Stocks were mixed Wednesday after Federal Reserve Chairman Jerome Powell again warned that tighter monetary policy was on the way. That may include rate hikes at consecutive Fed policy-setting meetings after the central bank hit pause in June. Still, equities are on track to finish the first half of the year on a high note. The broad S&P 500 is up more than 6% this quarter, which would be its third straight positive period. Meanwhile, investors will keep their eye on weekly jobless claims data Thursday morning. Follow
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3. Passing grades The 23 biggest banks passed the Federal Reserve’s
annual stress test, although results varied across the board. This year, the banks faced a “severe global recession” scenario that included a jump to 10% unemployment and a 38% decline in housing prices. The stress test came as the banking sector contends with the fallout from March’s regional bank failures, including the potential for tighter regulation. “We should remain humble about how risks can arise and continue our work to ensure that banks are resilient to a range of economic scenarios, market shocks, and other stresses,” said Michael Barr, the Fed’s vice chair for supervision.
Although banter over the pass by analysts indicates that yes the big banks passed (expected) but the regionals (like the ones that failed) were not tested and may not have faired as well with the test. More turbulence is on the horizon. Rate hikes, household debt, inflation etc. IMPO of course.