It seems we are nearing the end of the interest rate tightening cycle, with the RBA keeping things on hold, the Fed having slowed its rate of tightening, and the RBNZ expected to have put through their final super-sized rate hike.
Widespread weakness can be seen in the US banking sector. A deposit rate paradox has emerged, where raising deposit rates leads to a reduction in net interest margins, causing banks to operate at a loss. While leaving deposit rates near zero increases the likelihood that depositors withdraw their capital.
The rapidly changed interest rate environment now rewards a more traditional mix of bonds and equities, which deliver diversified return characteristics for the first time in some years.