The government’s borrowing limit is estimated to run out by early June. Investors should prepare for potential volatility as increased partisanship in Congress will potentially only be resolved at the final hour.

After a decade of relative strength, the US dollar has declined sharply over the last six months. This has coincided with media reports that the world may reduce dollar usage. The long-term impact has both positive and negative implications.

This report summarizes world capital market performance and a timeline of market events from the past quarter.

The FDIC took over Silicon Valley Bank (“SVB”) and Signature Bank in early March. To boost the stability of the banking system, the government effectively protected all depositors in the banking system. A crisis may have been averted, but risks remain.

On January 19, 2023, the U.S. government reached its legal $31.4 trillion debt limit. The odds of a default in the latest showdown remain low (for now), but odds of a full throttle drama as Congress works to raise the limit remain high.

2022 was an exceptionally bad year as inflation and higher interest rates wreaked havoc on markets. Stocks and bonds both fell more than 10% for the first time on record. Inflation will likely remain a focus for investors in 2023, but new surprises may emerge.