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Beginning in March 2022, the Fed carefully began raising interest rates as an attempt to curb rising inflation and ultimately orchestrate a soft economic landing rather than an all-out recession. Since that time, interest rates have risen at the fastest pace in over 40 years. The sharp rise in interest rates, although helpful for inflation, has other effects on the economy as evidenced by the failures of Silvergate Capital and Silicon Valley Bank and their impacts on the markets this month. In addition, troubled Credit Suisse was purchased by UBS and 11 large banks created a $30 billion rescue package for First Republic. Last week, the Fed was left with the conundrum of continuing to raise interest rates to curb inflation or hold off due to bank failures and potentially demonstrate some uncertainty about the security of the banking system. Interest rates were increased once again.

Considering all the recent occurrences, I thought I would share a few insightful resources with you:

1. The first resource, “The Soundness of the Banking System,” is an article written by Larry Adam, Raymond James’ CIO. It highlights the similarities between Silvergate Capital and Silicon Valley Bank. He also shares his thoughts on whether this is an isolated incidence or has the potential for a financial contagion with an ongoing economic impact.

2. I’m also sharing a 10-minute video from Raymond James Chair and CEO, Paul Reilly. This video was a message to Raymond James advisors and associates that we have been invited to share with clients. In light of the recent bank shutdowns, it discusses Raymond James’ secure positioning and its ability to weather economic downturns. Please use this link and enter the following password: rjstrength

3. Lastly, I’m sharing Raymond James Bank Enhanced Savings Program which keeps funds safe and liquid. New deposits from external sources qualify for this program with an attractive APY and FDIC insured deposits.

As always, if you have questions or concerns about your financial plan, please do not hesitate to reach out to us.

Todd M. Wike, CFP®
Managing Partner, Potomac Financial Group
2022 RJFS Chairman’s Council Member*

The information contained in this material does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Todd Wike and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Raymond James is not affiliated with and does not endorse the services or opinions of the various podcasts or applications discussed in this material. Chairman’s Council Membership is based on prior fiscal year production. Re-qualification is required annually. The ranking may not be representative of any one client’s experience, is not an endorsement, and is not indicative of advisors future performance. No fee is paid in exchange for this award/rating. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®,CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.