sparked a broader industry crisis. First Republic and PacWest have dropped approximately 88% and 61%, respectively, since the month began, pulling the KRE down roughly 27% over the same period., while Fed projections signaled there will only be one more hike this year.that the U.S. banking system was resilient, while noting recent turmoil could impact the economy.
"The U.S. banking system is sound and resilient," the FOMC said in its statement. "Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation." Powell said during his press conference that the weaknesses seen in Silicon Valley Bank were not apparent in the broader sector. He also said deposits in the banking system have stabilized over the last week.
"What I'm saying is you've seen that we have the tools to protect depositors when there is a threat of serious harm to the economy or to the financial system, and we're prepared to use those tools," Powell said. "I think depositors should assume that their deposits are safe."