Blockworks Macro, Released on 3/15/23

For some time now it has been the belief of many Fed-watchers that the Federal Reserve would continue to hike interest rates until it “breaks something.” Lyn Alden of Lyn Alden Investment Strategy returns to Forward Guidance to argue that the stunning collapse of two large U.S. banks represents such breakage. Alden tells Jack Farley that this damage will soon give way to a period of low real interest rates, where inflation runs above Treasury yields. Filmed the afternoon of March 15, 2023.

00:00 Intro
00:43 The Cause Of The Turmoil In Banking System
07:08 Are Rising Interest Rates Actually Good For Banks?
08:50 Alden’s Outlook on Banks As A Business
12:47 Has Something “Broken”?
15:38 Interest Rate Risk In The U.S. Banking System
22:43 Public Ad
23:48 Will Banks Become More Cautious About Making Loans?
31:11 Is The Fed’s Campaign To Raise Interest Rates Over?
38:37 Debt, Demographics, and MMT (Modern Monetary Theory)
53:28 Recession Risk
58:48 Stock Market During Financial Repression
01:01:29 Fractional Reserve Banking and “The Narrow Bank”

Lyn Alden is the founder of Lyn Alden Investment Strategy. Lyn has a bachelor’s degree in electrical engineering and a master’s degree in engineering management, with a focus on engineering economics and financial modeling. She worked as an electrical engineer at an aviation facility, and over the course of a decade worked her way up from being an intern to being the lead engineer and running the day-to-day operations and finances of the facility, before retiring early at age 33 with financial independence. Since then, Lyn has been a full-time investor and independent analyst.

  banking crisis, financial repression, inflation, lyn alden, stock market