Silicon Valley Bank’s failure Friday shined a spotlight on the large losses that the whole banking system has seen on investments in bonds as a result of rising interest rates.
Friday shined a spotlight on the large losses that the whole banking system has seen on investments in bonds as a result of rising interest rates.
If not, we should brace ourselves for a hard economic landing as additional parts of the financial system start to break.Not only did it keep rates near zero for far too long, it also flooded the market with liquidity by purchasing a staggering $4 trillion in US Treasury bonds and mortgage-backed securities.
As long as interest rates stayed low and the economy grew, weak borrowers were able to pay their debt.
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