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Recent bank failures a potential game-changer for the Fed
It is often said that the Federal Reserve (Fed) tightens until something breaks. In fact, history is peppered with examples of financial accidents caused by past Fed tightening cycles – Orange County’s default (1994), the collapse of Long Term Capital (1998), the bursting tech bubble (2000) and the housing crash (2008). That is why the market has been concerned about the Fed, particularly as the it has raised interest rates at the fastest pace in over 40 years and the full impact – which occurs with a lag – has yet to be seen. Last week’s sudden collapse of Silvergate Capital and Friday’s failure of ... (full story)