Markets seesawed severely this week when two of the US economy’s most prominent leaders gave seemingly contradictory statements on the health of the banking sector. Expect more turbulence ahead.
Fresh off of the Federal Reserve’s decision on Wednesday to hike interest rates by a quarter point, Fed Chairman Jerome Powell said in the central bank’s post-meeting press conference that “all depositors’ savings are safe.”
But elsewhere in Washington D.C., Treasury Secretary Janet Yellen testified Wednesday before a Congressional committee that she wasn’t considering a guarantee of all deposits.
A day later, Yellen said in something of a reversal that the federal government is ready to take more action to stop bank contagion if necessary to curb systemic risk.