The potential contagion of a run on banks remains in a tenuous spot, and we are not out of the bank failure woods, according to former Trump administration White House economic adviser Larry Kudlow.
"I can hold my breath and say it doesn't look like a severe contagion," Kudlow told Sunday's "The Cats Roundtable" on 77 WABC Radio.
But, he added to host John Catsimatidis, "I would say we're still on tenterhooks with this whole banking story."
"Tenterhooks" suggests people waiting anxiously for some clear response in the market, which is still sending mixed signals to economists.
Despite a $300 billion infusion from the Federal Reserve over the past two weeks, Kudlow says signals show "there's still a problem out there."
"We're waiting for food and grocery prices to come down; and if they do come, that would be a big help in this overall story — a very big help," Kudlow continued. "The bank stocks are obviously unhealthy.
"It's hard to mount a stock market rally when bank stocks are doing as badly as they're doing."
Working-class people do not want to be on the hook for "rogue banking," according to Kudlow, putting the blame squarely on the Biden administration: President Joe Biden, Treasury Secretary Janet Yellen, and Federal Reserve Chairman Jerome Powell.
"The country needs some leadership, and it's not getting it," Kudlow said.
The signals in the economy suggest inflation expectations are declining, or recession risk expectations are rising, or "maybe it's a combination of the two," he concluded.