Part 9/12:
The key question remains: Will the recent bank failures, starting with SVB, push the economy into a severe recession? The answer hinges on a cascade of factors:
Will depositors panic and withdraw en masse from more banks?
How will regulators respond to contain the fallout?
Will the Federal Reserve pivot from rate hikes to easing, and how quickly?
There's also the concern about the upcoming end of the student loan moratorium in June, which could lead to reduced consumer spending as borrowers resume repayments. For a substantial portion of the population—particularly younger individuals living paycheck to paycheck—this will be an added financial burden, possibly tightening economic activity.