It is often said that when the Fed embarks on a tightening campaign, it doesn’t stop until something breaks. On March 10, we finally got the answer to what the casualty of this rate hike cycle would be: Silicon Valley Bank being closed by the government in the face of an unprecedented bank run. Two days later, Signature Bank was also closed before various federal government agencies announced sweeping protections intended to halt the nascent contagion in the banking system. The stunning collapse of SVB occurred six days before the one-year anniversary of the current tightening cycle, which has proven to be one of the most aggressive on record. Q1 2023 market action was, broadly speaking, a complete reversal of what worked throughout most of 2022. Value stocks, which consistently bested growth last year, barely managed to eke out a gain for the quarter, while growth powered higher. Emerging markets had begun to outperform domestic markets toward the end of 2022 but lagged well behind both the U.S. markets and developed international indices.