On this Bloomberg TV appearance, Axonic Capital Director of Research Peter Cecchini discusses the importance of the U.S. Department of Treasury protecting the banking system and restoring confidence. He expresses concerns about moral hazard due to fractional reserve banking systems and highlights the significance of First Republic Bank in maintaining the bank lending channel for economic growth.
Cecchini emphasizes the need for the Treasury to restore confidence, as it is challenging to regain once lost. He also warns against the socialization of the banking system and the risks associated with shifting private banks’ responsibilities onto the government. Additionally, he speculates on the Fed’s upcoming rate hike decision and suggests that if the Fed starts cutting rates it may signal an impending recession and lead to a correction in equity markets.
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