Here Are Five Things You Should Know Before You Start Your Day

‍Fed Announcement

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As the Federal Reserve tries to balance its fight against inflation with an unexpected banking crisis on Wednesday, all eyes in finance and economics will be tuned to Chairman Jerome Powell, as he attempts to balance his fight against inflation with an unexpected banking crisis.

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During Powell's meeting with his colleagues Tuesday, the outcome of their meeting was unusually murky going into the meeting. Some economists maintain that policymakers should take a step back to ensure financial stability, even if most economists expect a quarter-point rise in interest rates. For the first time since the Fed's frenetic tightening cycle began a year ago, bond traders do not appear to be fully convinced of the central bank's policies for the first time in its history.

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First Republic Is Saved

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There are reports that Wall Street leaders and US officials are discussing the possibility of a government intervention to help shore up First Republic Bank after the lender has been in disarray for some time, say people with an understanding of the matter. 

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As part of an attempt to ensure that there won't be a repeat of the 2008 financial crisis, the group has proposed a number of measures that would make the company more appealing to potential buyers or investors.

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UBS Proposal

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The Swiss banking giant UBS has offered to buy back 2.75 billion euros ($3 billion) worth of bonds that it issued just days before it saved Credit Suisse from bankruptcy. 

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The Swiss largest bank reoffered its senior unsecured bail-in notes due in March 2028 and March 2032 on March 19 for cash at the reoffering price in response to "exceptional corporate actions." As a result of Silicon Valley Bank's collapse earlier this month, the government brokering deal that led UBS to buy its rival brought about a financial market selloff. 

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Swiss authorities ordered Credit Suisse to freeze deferred bonuses, further devaluing the value of bankers' awards after their stock tumbled.

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Fluctuating Stocks

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Investors prepared for the Fed's decision by observing European stocks fluctuate narrowly and US equity futures edge lower. Treasury yields fell after a surge of 19 basis points on Tuesday, increasing two-year yields by 19 basis points. After a surprise increase in UK inflation, the pound strengthened.

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Fed Day

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Powell & Fed appear to have some ambiguity about their plans for the first time in the hike cycle. According to markets, there is only an 80% chance of a 25 bp hike. 

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According to predictions, Powell's press conference would be his most difficult yet. The day should be interesting, at the very least. The author of a recent study shows that Powell's press conferences have three times the volatility of Bernanke's or Yellen's press conferences. The circumstances may also play a role in some of that. A pandemic or inflation was not faced by either Yellen or Bernanke.