The hammers are coming down. The heads of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve are considering making the capital rules stricter for banks with over $100 billion in assets. Three such banks failed recently and dragged the whole industry down, showing that banks of this size can cause financial stability problems due to both external and internal pressures. While some rules might apply to smaller banks, the majority of the new requirements will likely be for the largest global banks. In response, the banking industry, represented by the Financial Services Forum, says that it is concerned that strict requirements could limit lending and hurt the overall economy. The balance between stability and growth is a question the FIDC has to answer for the economy, as stricter lending will destroy more business than it should.   

EQUITY

Fed Chair Powell wrapped up his testimony, which saw interest sensitive stocks such as FAANG receive a boost, although he clearly indicated that the central bank has not finished its fight against inflation just yet. Jobless claims that came in high gave hope that the Fed would continue to pause while the Bank of England, in a surprise move, hiked interest rates by half a percent rather than the expected quarter basis point. Amazon is the biggest winner on Thursday, although the FTC is looming.

GOLD

Gold struggled and lost in a move on Thursday that saw it break below support and continue downward on Fed Chair Powell's comments and a gloomy global growth outlook. BoE higher interest also pressured gold as demand for it dwindled in an environment where money market funds gave high enough yields. 

OIL

Oil shorts are gaining ground as prices head towards a weekly drop of over 4% as concerns grow about the impact of interest rate hikes in Britain and potential rate increases in the United States on oil demand. The market is anxiously awaiting the release of Purchasing Managers Indexes (PMIs) to assess demand trends, while fears of further rate hikes continue to loom.  

CURRENCY

The U.S. dollar strengthened as Fed Chair Jerome Powell supported further rate increases and multiple central banks raised their benchmark interest rates. Sterling was volatile after the BoE raised its main interest rate to 5%, the highest since 2008. Bitcoin saw gains and reached its highest level since mid-April following BlackRock's plan to launch a bitcoin exchange-traded fund (ETF).