Bank Failures and the Fed

One could consider the Federal Reserve’s monetary tightening policy strategy as akin to the apologue of boiling a frog – or slowly turning up the heat until it’s too late. Last week, during his semi-annual Humphrey-Hawkins testimony, FOMC Chair Jerome Powell turned up the heat by signalling that the Fed could once again increase its fed funds overnight benchmark rate by 50 basis points (bps), and this coincided with a run on Silicon Valley Bank (SVB). Read on to find out more.