Decoding the Fed's Latest Decision for Clues to the Future

Anastasia Amoroso, Chief Investment Strategist for iCapital, rejoins the show to help decode the Fed's latest decision on interest rates and the curious language in its statement. Plus, what she is looking for inside bank balance sheets to determine just how healthy, or sick, they actually are. And, despite the swirling fears around the banking sector, some of the riskiest assets are the best performers in the first quarter. Will that continue?

Meet Anastasia Amoroso

Anastasia Amoroso is a managing director and the Chief Investment Strategist at iCapital. In this role, she is responsible for providing insight on private and public market investing opportunities for advisors and their high-net-worth clients.

Previously, Anastasia was an executive director and the head of Cross-Asset Thematic Strategy for J.P. Morgan Private Bank, where she identified and invested in emerging technologies and disruptive trends such as artificial intelligence, decarbonization, and gene therapy.

Anastasia regularly appears on CNBC and Bloomberg TV and is often quoted in the financial press. She graduated summa cum laude from the University of New Mexico and is a CFA charterholder.

What's in this Episode?

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Term of the Week: Bank Risk Transformation

This week's term comes to us from Madeleine, who hit us up on Instagram, suggesting 'bank risk transformation', and we like that term given all the sudden interest in balance sheets of banks all around the world.

According to our favorite website, bank risk transformation is the process by which banks and other depository institutions evaluate their credit risk against the deposits they hold, and the loans they make. It involves diversifying where and how the bank is invested, managing risks throughout these investments, screening borrowers for default risk, and creating and holding adequate capital reserves to absorb any losses in outflows. It's what appeared to be missing at Silicon Valley Bank (SVB) and Signature Bank, and now investors and regulators are laser-focused on the degrees of bank risk transformation happening—or not happening—inside the global banking system.

Great suggestion, Madeleine. You helped make us a little bit smarter this week, and we're going to be sending you some of Investopedia's finest socks for that.

Links for Show Notes

• Anastasia Amoroso | iCapital
• Insider Insights Newsletter
• What to Expect in the Markets Next Week
• FOMC Summary of Economic Projections: March 22, 2023
  
• CME FedWatch Tool: Target Rate Probabilities for May 3, 2023 Fed Meeting
  
• Credit Cycle: Definition, Factors, and Use in Investing
  
• Market Risk: Definition, How to Deal with Systematic Risk
  
• What is a Credit Default Swap (CDS) and How Does It Work?