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https://www.wsj.com/articles/fed-interest-rates-inflation-svb-collapse-3495de76

Collapse of Silicon Valley Bank, Signature Bank Calls Fed Interest Rate Path Into Question

Banking crisis could put Fed officials in uncomfortable position on next steps in inflation fight

The abrupt collapse of the Silicon Valley Bank, the second-biggest bank failure in U.S. history, prompted regulators to impose emergency measures to stem the fallout. WSJ’s Rachel Ensign explains how the crisis unfolded and what could happen next. Photo: Preston Gannaway for The Wall Street Journal

By Nick Timiraos

Updated March 13, 2023 3:43 pm ET

There is a saying that the Federal Reserve raises interest rates until something breaks. A big surprise over the past year had been that nothing broke.

No more. A sharp selloff in regional bank stocks Monday following the collapse of Silicon Valley Bank and Signature Bank risks pushing the Fed uncomfortably close to the one place it wanted to avoid over the past year: resolving a financial-stability trauma at the same time it fights high inflation.

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