Hard to unwind what just happened in March. Savers now know how to search for yield, especially in money markets (so long as the Fed keeps rates up). Meanwhile unless rates and spreads rally all the way to the 2020-21 lows, most banks will be harboring losses ahead and at the risk of deposit migration. Meanwhile the rates shock end game turned into a potential credit crunch as banks become risk averse (along with slower economic activity turned recession) will likely hit cashflows and loan holdings (not to mention eventual defaults). Banks are not out of the woods yet. This all leads to the fallacy of the “soft landing” or worst “no landing” dreams from the start of the year (we never had them btw). The US economy is leveraged to low rates, excess liquidity and access to credit. It’s as if most economic forecasters do not incorporate liquidity dynamics (or ignore liquidity unless the Fed is “printing“) and financial conditions in their frameworks. The macro stars now have to align quickly for the US economy to avoid a recession later in the year, where the real question will likely become what kind of recession will we experience and for how long?