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The Economist — Economy — Impact of the Fed's tightening cycle on financial markets — Monetary Policy — Banking — Finance

For markets Silicon Valley Bank’s demise signals a painful new phase

Silicon Valley Bank's collapse has sent shockwaves through financial markets, indicating a painful new phase as the Fed's tightening cycle starts to bite and investors bet on rate cuts to avoid further failures.

1 min read
  • Silicon Valley Bank's collapse sends shockwaves through financial markets.
  • Nasdaq's bank shares index drops 25% in a week, erasing gains over 25 years.
  • The Fed's tightening cycle starts to bite, working with markets rather than against them.
  • Investors still betting on rate cuts, reflecting fear of further failures.
  • Fed needs to make lenders nervous and businesses risk-averse to squeeze inflation out.
For markets Silicon Valley Bank’s demise signals a painful new phase
The Fed’s tightening is starting to bite | Finance & economics
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