The SVB collapse gives no cause for the Fed to pause
The real story here is about keeping monetary policy separate from the need for further regulatory reform to achieve the most sustainable outcome in the end.
Extreme low interest rates at the short end, with the long end held down via QE policies, are distortions that lead to bad investment decisions. Silicon Valley Bank is an illustration of the latter.
The SVB crisis should not be an excuse for the US Federal Reserve to weaken its anti-inflation resolve. I doubt it will.
Loading...
Adrian Blundell-Wignall writes on the world economy and is a former director of the OECD. He is currently in Paris.
