The Lingering Effects of the Banking Crisis on the Economy and Stocks

The banking crisis that began in March is having a slow impact on the US economy, with smaller banks facing a tougher slog and a fight for survival. Larger institutions like JPMorgan Chase and Bank of America sustained far less of a hit. The small banks are going to be lending less, which is negative for growth. The reading on first-quarter economic growth is expected to be largely positive despite the banking problems. However, the growth isn't expected to last due to the Federal Reserve interest rate hikes aimed purposely at cooling the economy and bringing down inflation, and the constraints on small-bank lending.