On the heels of two recent bank failures, the Biden administration and much of the mainstream media attempted to reassure consumers and investors about the state of the US economy.

Treasury Secretary Janet Yellen said that the US’ banking system is ‘strong’ and allayed potential concerns about a domino effect in other banks.

“America’s economy relies on a safe and sound banking system,” Yellen said in an interview with CBS’s “Face The Nation.”

Still, others have raised concerns about spillover effects from the bank crash that have already harmed businesses and retail investors.

In a move that casts further doubt on Yellen’s reassurances, top credit rating agency Moody’s Investor Service downgraded the US banking system’s outlook to ‘negative’ on Tuesday.

They also are considering downgrading six US banks credit ratings, including multiple high-profile banks such as Western Alliance, Comerica, and First Republic Bank.

Moody’s further said that they expect the US economy to undergo a recession later this year, though they believed the US banking system is equipped to handle it.

Breitbart Reports

Moody’s Investors Service cut its outlook for the U.S. banking system to negative from stable and placed six U.S. banks on review for potential credit rating downgrades.

“We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in a report released Monday.

The ratings agency warned that there was still a risk of bank runs at U.S. banks with substantial unrealized losses.

“Banks with substantial unrealized securities losses and with non-retail and uninsured US depositors may still be more sensitive to depositor competition or ultimate flight, with adverse effects on funding, liquidity, earnings and capital,” Moody’s said.

Even banks that do not experience runs are likely to face rising funding costs, cutting into profitability, Moody’s said.

“We expect pressures to persist and be exacerbated by ongoing monetary policy tightening, with interest rates likely to remain higher for longer until inflation returns to within the Fed’s target range,” the report said.

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