Moral hazard? Hawkish pause? What these terms mean and why should investors care

The Signature bank logo is seen in this photo illustration in Warsaw, Poland on 13 March, 2023.

Jaap Arriens | Nurphoto | Getty Images

With the stock market whipsawed over concerns about a banking crisis, there’s been a lot of debate on Wall Street and in Washington about the actions that the Federal Reserve and the Treasury have taken since the failures of Silicon Valley Bank and Signature Bank. Two phrases are being thrown around on CNBC and elsewhere: “moral hazard” and “hawkish pause.” Here’s what they mean and how these four words are shaping this evolving situation. We hope Club members can take what they learn here to better inform their understanding of the issues dominating the market and how they may impact their portfolios.

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