Silicon Valley Bank Fail

A short time ago Jamie Dimon, the CEO of JPMorgan Chase, reported the message that a “financial hurricane was possible.” He was quickly reprimanded in the press for fear mongering.

This past week Silicon Valley Bank, a large California banking enterprise with a national footprint (16^th largest in the country), announced they’re closing down. Silicon’s book of business recorded 97% uninsured deposits. Washington D.C. organized an all-encompassing approach to protect deposits.

The root of the problem stems from regulators, Congress and the Federal Reserve jacking up rates too quickly to counter rapid inflation. This confluence caused an abrupt rise in interest rates and contributed to the run on SVB.

The marketplace will adjust to this altercation. Future rates (disseminated on March 21) by the Fed will likely be lowered to 25 basis points and could very well be their last hike. This Fed meeting may signal that the end of the inflation battle is finally here. The hawkish Fed tone has concluded.