Four medium and small sized U.S. banks required Federal regulators to take over management of their operations and assets or shore up their depositor bases since March 7, casting new uncertainties over the investment outlook. The threat to the banking system complicated the Federal Reserve’s aggressive yearlong monetary tightening campaign to choke off inflation without triggering a recession.

The confluence of a banking crisis as the Fed’s following eight hikes in the Fed funds rate in the past year has unnerved the stock market and made short-term Treasury bills yields higher than 10-year Treasury bond yields, which is another strong reason to expect a recession in 2023.