[REGNUM] 19FortyFive: US Fed should review policy to avoid 'hard landing'
The recent failures of US banks Silicon Valley Bank (SVB) and Signature Bank have become a rude reminder to the Federal Reserve (Fed) that bank failures lead to credit crises that can plunge the US economy into recession, writes 19FortyFive.
The Fed runs the economy like a driver looking in the rearview mirror, not the road ahead.
Experts in the US noted that in 2022 the Fed increased rates without proper analysis of potential risks that could undermine the economic recovery. As inflation turned out to be high and labor markets continue to be "tight", the Fed raised interest rates at the fastest pace in 40 years during the year.
The authors of the article noted that, based on past experience, the most serious problems will arise precisely in the unregulated part of the financial system: hedge funds, pension funds, insurance companies.
"This is of extreme concern, since these institutions serve as intermediaries a volume of credit that is much larger than the usual banking system," the material explains.
In conclusion, the publication warned that if the Fed continues to look in the rear-view mirror as if nothing had happened and raise interest rates, spitting on financial problems, "the economy is in for a hard landing."
As REGNUM reported , on April 5, Redacted News host Clayton Morris said that the financial crisis in the United States was provoked by the authorities, but they refuse to admit it.
According to him, the country is experiencing a financial crisis, which is accompanied by the collapse of banks, and such an outcome has long been predicted by experts. At the same time, the Fed acknowledged that a recession is coming, while at the same time saying that US banks are safe.