The Fed could halt hikes or cut rates amid banking crisis: analysts

are still getting hammered.

"Judging by the market's reaction, financial markets seem to view these policy actions as insufficient, as stock prices for the US financial sector continue to decline as of this writing," the economists wrote."One market concern is that a deposit flight might not slow anytime soon" due to various reasons, including concerns from corporate customers that they may not have access to their deposits — even temporarily.

Even though a 0.25 percentage point rate cut is unlikely to be a"panacea" for banks, markets could quickly price in further rate cuts if the Fed signals lower rates in the future, the Nomura analysts wrote. "This could somewhat reduce the risk of further bank runs, as well as reduce unrealized capital losses," they added. That's because bond prices and yields have an inverse relation, so when interest rates drop, prices bond prices tend to go up, which could alleviate losses.

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