Treasury yields are 5-8 basis points lower to start the morning amid a modest risk-off tone. Shares of First Republic Bank are down more than 25% in pre-market trading after the company’s Q1 earnings report showed a 41% decline in deposits over the period, a bigger drop than analysts were expecting. The bank also announced it will cut up to 25% of its workforce, and it’s a reminder of the challenges still facing some banks in the fallout from the March failures of SVB and SBNY. The Fed has entered the blackout period ahead of next Wednesday’s FOMC meeting. Fed funds futures are currently pricing a 90% probability of a 25 basis point rate hike next week, which would also be the final rate hike by the same metric.
Jason Haley
Chief Investment Officer
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