As expected, the ECB raised its main policy rate by 50 basis points on March 16 to 3.50%. However, the ECB has not given any clear indication of whether it will continue to raise rates and intends to rely on the upcoming economic indicator releases to determine the way forward.

This week, we'll start with the US Federal Reserve, whose monetary policy meeting is scheduled for Wednesday, March 22. At the time of writing, the consensus is for a quarter-point increase, which would bring interest rates to 5%. However, it should be noted that investors are now counting on a final rate hike in May followed by a cycle of rate cuts starting this summer with a target for the end of the year of around 3.75% (see chart below). The expected path for the Bank of England is much the same, with a 25 basis point hike to 4.25% expected on Thursday followed by one or two more rate hikes between now and the summer before resuming a more accommodative policy.

The sources of concern have suddenly grown due to successive bankruptcies in the banking sector. The market fears a domino effect, while the spectre of a major financial crisis similar to the one experienced by the less young among us in 2007-2009 has resurfaced. The authorities are calling for calm, arguing that the legislator has done everything possible to strengthen the balance sheet situation of banks over the past decade. In other words, don't worry, your money is safe, the banks (those subject to Basel III anyway) are solid. Well, until next time.

In the meantime, market participants are becoming more anxious as evidenced by US and German 10-year yields near turning points at 3.35% and 1.99% respectively. A break of these levels could be interpreted as a tangible sign of a coming recession. An informed investor is worth two.