The banking system is hardly strong despite Fed Chair Powell’s comments this week to that end. When the Fed lifts its Fed Funds Rate in July (our guess), and again in August or September, we will very likely see a new rash of bank failures. Many will fail even if the Fed takes no rate action. Three banks have failed in 2023 (HERE). We will definitely see bank M&A activity pick-up.

• The Bank Term Funding Program (BTFP, bail out/QE) had approximately $102.0 billion in outstanding loans as of Wednesday this week, up from $100.2 billion (+ $1.8 billion) a week ago.
• The “other credit extensions” line item of $180.5 billion includes the FDIC loans made to regional banks. This figure is down from $185.2 billion (- $4.7 billion) a week ago.

FEDERAL RESERVE statistical release: https://www.federalreserve.gov/releases/h41/current/

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