Credit Cruntch?
Capital One, Ally, Santander and Next Gear Capital have started pulling inventory floor plans from dealers. Small and used car dealers will have a hard time buying inventory of cars as credit lines are pulled.
The banking crisis reverberations are spreading as lending tightens. As rates will remain high, Fed still has no plans of pausing (2 more rate hikes are possible with 1 assured), banks tightening, and liquidity woes continue, the banking crisis is not over. In fact, it is just the beginning.
None of the issues of SVB and Credit Swiss have been solved. MMF are still growing, deposits still fleeing, long yield safe assets are still in the red and the banks are borrowing at high rates at the discount window and reverse repo market.
At least the Fed has now abandoned the soft landing story and is moving to a mild recession. They might abandon that too in 6 to 9 months for a hard landing.
