The Ripple Effect of Small Bank Collapses on Interest Rates and the Economy

DataTrek Research warns that the stock market could see a 3% to 5% sell-off if the Federal Reserve decides against an interest rate hike at the March meeting, as it would suggest more banks are teetering. A pause in rate hikes "would be a sign that they knew other US regional banks were on the precipice of failure," said DataTrek cofounder Nicholas Colas. Moody's recently cut its outlook on the entire US banking system, citing the rapid deterioration of the financial landscape, given the bank runs and government intervention.