- Deposit outflows from the banking system have stabilized. Things have been calm but monitoring carefully
- Bank lending standards have tightened somewhat , may be more tightening to come
- Not seeing anything dramatic enough to significantly change outlook for moderate growth, strong labor market and easing inflation
- Over time, there is risk that financial system sanctions linked to dollar could 'undermine the hegemony' of the US dollar
- Sanctions do create desire by China, Russia and Iran to find an alternative to dollar
I find it interesting that Yellen said outflows from the banking 'system' have failed rather than saying outflows from small banks have stabilized. Jim Bianco highlights that yesterday mega-cap US banks jumped and small cap banks fell 2.1% in a sign that money is flowing in one direction without leaving the system.
