Safe havens and risk assets both rise as banking woes shift Fed expectations

Worries over the banking crisis are boosting disparate assets, with traditional safe-havens such as gold, Treasuries and money markets seeing high demand along with more speculative instruments such as tech stocks and bitcoin.

The unusual cross-currents come as the financial distress that started earlier this month with the collapse of California’s Silicon Valley Bank has spread to Europe, with investors on edge about the health of the financial system even after UBS Group agreed to buy ailing Credit Suisse in a state-backed takeover and major central banks took steps to reassure markets.

The troubles in the financial sector have sparked rapid repositioning in asset markets, as investors bet the Federal Reserve and other central banks will have to slow interest rate hikes in order to avoid hurting the economy as the banking woes threaten to slow growth.

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