The growing and deepening crisis in the regional banking sector is not likely to go away anytime soon as the Federal Reserve hikes or holds rates at elevated levels. The stress in the banking sector is slowly spilling over to commercial real estate as banks curtail lending to shore up their faltering balance sheets.
The latest rate hike in the fed funds rate failed to end the rate path uncertainties as investors struggled to decipher Fed's next moves and how high rates will rise. With the labor market showing no signs of weakening and inflation staying significantly above the target level, marker uncertainty is likely to persist for months.