#federal-reserve-interest-rates

#federal-reserve-interest-rates

September, or more likely October, is now the realistic opportunity for a rate cut, and even that is far from guaranteed. The data coming through is not consistent with easing in July. In fact, it points in the opposite direction. Inflation is not falling fast enough. The latest wholesale inflation data shows prices rising at 3.4% year-on-year, the strongest pace in a year, and core measures are still running close to 4%.

The bank had bought a lot of bonds, which got less valuable as the Federal Reserve raised interest rates after keeping them low during the thick of COVID-19. The bank's depositors were predominantly tech companies, who were worried that their money wouldn't be there if they needed to withdraw. So a lot of them rushed to do just that, and there wasn't enough money, and that was the end of Silicon Valley Bank as we once knew it.