The Looming Banking Crisis: Implications for Federal Reserve

TLDR; A major bank is failing, with decreased income, high credit losses, and potential misleading tactics, raising concerns about a coming banking crisis and the impact on the Federal Reserve.

⚠️ Banking Crisis 2.0

New York Community Bank and Flagstar are dropping to crisis levels seen during the last banking crisis.

Quarterly income reflects a 16% decrease in net interest income and increased total losses due to larger credit losses than expected, indicating a troubling financial situation.

Misleading tactics include hiding a $1.3 billion outflow and downplaying the impact of significant loan losses, raising concerns about the bank's stability.

💰 Implications on Federal Reserve

The ending of the bank term funding program on March 11th may lead to the Federal Reserve cutting soon, not solely due to inflation concerns, but also to address the potential banking crisis.

This situation could substantially increase the odds of the Federal Reserve cutting, indicating the severity of the potential crisis.