Stocks and bonds gained value in March, but that headline masks a significant amount of volatility, courtesy of the banking sector. Along with the Silicon Valley Bank (SVB) collapse and the government’s decision to engineer a non-bailout bailout, March also saw Signature Bank fail and Credit Suisse crumble, leading Swiss regulators to arrange its purchase by UBS. Amidst all of this, economists are still worried about a potential recession. Let’s dig in.

Economic data and policy

As expected, the Federal Reserve hiked rates by 0.25% (or 25 basis points) in late March. The central bank released a statement in conjunction with the rate hike that acknowledged the turmoil in the banking industry and its potential to negatively impact the economy, while keeping its focus squarely on inflation and jobs.

Inflation remains elevated. The U.S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.

Prices rose 6% between February 2022 to February 2023, the smallest annual increase since September 2021. In its most recent statement, the Fed reiterated its target of a 2% inflation rate over the long run, in addition to maximum employment.

Speaking of employment, the February jobs report, released in early March, showed the fewest job openings in nearly two years. The Labor Department reported less than 10 million job openings, well below Wall Street estimates; analysts say this may indicate the nine rate hikes over the past year are finally spilling over into the job market.


Stocks rose in March, despite the volatility caused by SVB and Credit Suisse. Still, concerns about the banking system seem to be lingering.

JP Morgan Chase CEO Jamie Dimon penned a letter to shareholders April 4, saying the banking crisis isn’t over. The move comes three weeks after former Goldman Sachs CEO Lloyd Blankfein appeared on CNN to express concerns about the U.S. banking system. (Both Goldman Sachs and JP Morgan received bailout funds in the wake of the 2008 Financial Crisis.)

While there are major differences between the bank-related panic of March 2023 and the Financial Crisis, the similarities were enough to send the S&P Banks Select Industry Index (a benchmark for the financial services sector) steeply lower in March. 


Bonds rallied in March, as measured by the Bloomberg U.S. Aggregate Bond Index. While the index is still down just under 4% over the past year, the recent rally shows interest rate increases may finally be offsetting some of the pressure on bond prices. Remember, this key benchmark measures total return; the changes to bond prices and yields may impact you and your portfolio differently depend on your individual goals and the role bonds play in your portfolio.

Other investments

Last month we called out cash, and cash equivalents, as a potential opportunity for investors in 2023. Higher interest rates mean better yields on cash accounts, as well as cash equivalents. Still,a Bankrate survey in late February/early March showed fewer than one in four Americans is using a savings account that pays more than 3% annual interest; many savers are using accounts yielding less than 1% in interest or simply don’t know what the rates on their accounts.

We’ll be digging further into cash equivalents this month, but in the meantime, consider checking the rate on any saving and checking accounts to see if the interest rates have increased alongside market rates.

As we move into the second quarter, remember that there’s more going on in the market and economy than the headlines convey. Try to look at current events through the lens of your personal goals, and if you have specific questions, reach out.