The bankruptcy of the Silicon Valley Bank (SVB) sent shock waves through the global financial markets and plunged the Fed into a quandary: The central bank is primarily responsible for a stable dollar, but also monitors financial stability – both goals can contradict each other.
The fact that inflation in February was as expected and not higher gives the Fed leeway. An earlier end to the series of interest rate hikes or at least less sharp interest rate hikes in the cycle now seems possible. That would have a major impact on savers, investors and consumers.
