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10 sats \ 5 replies \ @halleck 29 Dec 2023 \ on: U.S. Banks Confront Unrelenting Deposit Erosion econ
Could this be explained as a reversion to a "natural" trend line as COVID stimulus is leaving savings? I followed the link you posted in other comments, and it doesn't have a lot of history.
The fall on Q1 happened during the bank runs and the bankruptcies of SVB and the others. The general negative trend could be the result of what You explained (and inflation). But to me it seems as if trust has been lost. Flight to save haven assets for sure drives it, too.
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I do agree that among us that watch financial news, there is a reduction in trust. Bank runs and collapses are a big deal. I think we should continue to watch with a cautious eye to see if deposits catch a trend line (something like steady inflation) and start nominal growth again sometime in '24.
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To be honest I give inflation a good chance to roar back in the 2nd half of '24 due to energy. Looks like we are following the 70's path closely.
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I agree. I expect inflation to come back. A combination of supply chain shocks and loosened monetary policy should see that graph bounce. Energy is always hard to predict because of the entities that control oil supply.
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Aaaand: watch how the EU finance ministers killed the rest of the Maastricht rules last week. They need to fill the fast growing fiscal gaps.
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