Large banks swoop in to rescue First Republic
The current turmoil in the financial market means buying a home could be difficult, especially if government regulators such as the Federal Reserve crack down on banks after the end of the SVB. The Fed has also been on a historic streak of rate hikes to keep inflation under control, and most economists expect that to continue.
“If banks are stressed, they will be reluctant to lend,” Treasury Secretary Janet Yellen testified before the Senate Finance Committee on Thursday. “We may see credit become more expensive and less available.”
“This could turn it into a source of significant downside economic risk,” he added.
The banking meltdown over the past week has left more questions than answers. The spectacular collapse of two US banks and a loss of investor confidence in Credit Suisse sparked wild market swings and left Wall Street on edge.
During CNN’s prime-time special, “Bank Bust: Inside the Collapse of SVB,” experts weigh in on how to best understand what’s happening in a rapidly evolving and confusing environment for financial institutions. .
“I think realistically, from what we’ve heard from the Fed, interest rates are likely to go up,” said Vivian Tu, a former JPMorgan trader.
“On top of that, I think a lot of people are very concerned about, ‘Hey, if I’m saving for a down payment, is the bank a safe place to put that money?'”
A 30-year fixed-rate mortgage averages 6.73%. In the week ending March 9. A year ago it was 3.85 percent.
Freddie Mac is set to release its average weekly mortgage rates on Thursday at 12 pm ET.