{"id":99164,"date":"2025-02-20T09:49:07","date_gmt":"2025-02-20T09:49:07","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/the-fed-doesnt-want-to-break-the-bank\/"},"modified":"2025-02-20T09:49:07","modified_gmt":"2025-02-20T09:49:07","slug":"the-fed-doesnt-want-to-break-the-bank","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=99164","title":{"rendered":"The Fed Doesn\u2019t Want to Break the Bank"},"content":{"rendered":"<p> <br \/>\n<br \/><img decoding=\"async\" width=\"150\" height=\"150\" src=\"https:\/\/blog.brinkercapital.com\/wp-content\/uploads\/2023\/03\/AdobeStock_84970938-150x150.jpg\" class=\"webfeedsFeaturedVisual wp-post-image\" alt=\"\" style=\"margin-bottom: 5px;clear:both;max-width: 100%\" loading=\"lazy\" \/><\/p>\n<p>We believe monetary policy acts with a lag, that it takes months, if not years, for changes in the Fed Funds Rate to impact the economy. That dynamic is one reason why the Fed often goes too far one way or the other, leaving rates too low for too long which leads to more inflation than the bank desires, or raising rates too fast and too far which leads to the recessions the bank seeks to avoid. We think this is a point worth making now for two reasons: we are about to mark the anniversary of the first Fed Funds Rate hike of this cycle and Fed policy decisions of the past three years had a meaningful impact on the US banking sector last week, particularly Silicon Valley Bank (SVB).<\/p>\n<p>As it concerns the former, the Fed raised the Fed Funds Rate by 25 bps at its March 2022 meeting, and the market \u2013 despite the hawkish testimony of Chairman Jay Powell before Congress last week \u2013 expects the Fed to raise rates by 25 bps when it meets next week, taking the Fed Funds Rate to a range of 4.75% to 5.0% (a year ago, the Fed Funds Rate was in a range of 0% to 0.25%). As it concerns the latter, Wall Street was unnerved last week as it came to appreciate that many banks are sitting on significant \u2013 if unrealized \u2013 losses in their fixed income portfolios, as the bonds they purchased when rates and yields were near zero are worth much less today now that rates and yields are much higher. These \u201cpaper losses\u201d are typically not an issue for banks as they tend to hold bonds to maturity. But in the case of SVB, the bank last week recognized a loss of $1.8 billion on the sale of $21 billion worth of securities, a development that sparked a 60% fall in its share price and the sharpest drop in the KBW Nasdaq Bank Index since 2020 (see chart).<\/p>\n<p>As we took pen to paper on this week\u2019s note, SVB had been shut down by regulators, making it the second-biggest bank failure in US history. We don\u2019t think the failure of SVB portends systemic risk for the banking sector \u2013 we think the industry is too well-capitalized and the economy is too robust. We do think the failure of SVB is a reason for the Fed to consider again the impact its rate hikes of the past year have had (and will have) on the economy and to consider again the importance of raising the Fed Funds Rate by only 25 bps at its upcoming meeting.<\/p>\n<p><a href=\"https:\/\/brinkerblog.wpengine.com\/wp-content\/uploads\/2023\/03\/BCI_Weekly_Wire_03-13-23_V1_SF-1.pdf\">Download the weekly wire<\/a><\/p>\n<p><em>The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital Investments, LLC, a registered investment advisor. 730-OPS-3\/13\/2023<\/em><\/p>\n\n","protected":false},"excerpt":{"rendered":"<p>We believe monetary policy acts with a lag, that it takes months, if not years, for changes in the Fed Funds Rate to impact the economy. That dynamic is one reason why the Fed often goes too far one way or the other, leaving rates too low for too long which leads to more inflation [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":99165,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[2331,6792,7997,12715],"dealstore":[],"offerexpiration":[],"class_list":["post-99164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-bank","tag-break","tag-doesnt","tag-fed"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Fed Doesn\u2019t Want to Break the Bank - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=99164\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Fed Doesn\u2019t Want to Break the Bank - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"We believe monetary policy acts with a lag, that it takes months, if not years, for changes in the Fed Funds Rate to impact the economy. That dynamic is one reason why the Fed often goes too far one way or the other, leaving rates too low for too long which leads to more inflation [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fivemor.com\/?p=99164\" \/>\n<meta property=\"og:site_name\" content=\"Som2ny Network\" \/>\n<meta property=\"article:published_time\" content=\"2025-02-20T09:49:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"150\" \/>\n\t<meta property=\"og:image:height\" content=\"150\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/fivemor.com\/?p=99164#article\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/?p=99164\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\"},\"headline\":\"The Fed Doesn\u2019t Want to Break the Bank\",\"datePublished\":\"2025-02-20T09:49:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=99164\"},\"wordCount\":472,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=99164#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg\",\"keywords\":[\"BANK\",\"break\",\"Doesnt\",\"Fed\"],\"articleSection\":[\"Investing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/fivemor.com\/?p=99164#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fivemor.com\/?p=99164\",\"url\":\"https:\/\/fivemor.com\/?p=99164\",\"name\":\"The Fed Doesn\u2019t Want to Break the Bank - Som2ny Network\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=99164#primaryimage\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=99164#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg\",\"datePublished\":\"2025-02-20T09:49:07+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/fivemor.com\/?p=99164#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/fivemor.com\/?p=99164\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/?p=99164#primaryimage\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg\",\"width\":150,\"height\":150},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/fivemor.com\/?p=99164#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/fivemor.com\/?bp_activities=1\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Fed Doesn\u2019t Want to Break the Bank\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/fivemor.com\/#website\",\"url\":\"https:\/\/fivemor.com\/\",\"name\":\"Som2ny Network\",\"description\":\"Daily Deals\",\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/fivemor.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/fivemor.com\/#organization\",\"name\":\"Som2ny Network\",\"url\":\"https:\/\/fivemor.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"width\":300,\"height\":86,\"caption\":\"Som2ny Network\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/fivemor.com\"],\"url\":\"https:\/\/fivemor.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Fed Doesn\u2019t Want to Break the Bank - Som2ny Network","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fivemor.com\/?p=99164","og_locale":"en_US","og_type":"article","og_title":"The Fed Doesn\u2019t Want to Break the Bank - Som2ny Network","og_description":"We believe monetary policy acts with a lag, that it takes months, if not years, for changes in the Fed Funds Rate to impact the economy. That dynamic is one reason why the Fed often goes too far one way or the other, leaving rates too low for too long which leads to more inflation [&hellip;]","og_url":"https:\/\/fivemor.com\/?p=99164","og_site_name":"Som2ny Network","article_published_time":"2025-02-20T09:49:07+00:00","og_image":[{"width":150,"height":150,"url":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg","type":"image\/jpeg"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/fivemor.com\/?p=99164#article","isPartOf":{"@id":"https:\/\/fivemor.com\/?p=99164"},"author":{"name":"admin","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371"},"headline":"The Fed Doesn\u2019t Want to Break the Bank","datePublished":"2025-02-20T09:49:07+00:00","mainEntityOfPage":{"@id":"https:\/\/fivemor.com\/?p=99164"},"wordCount":472,"commentCount":0,"publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"image":{"@id":"https:\/\/fivemor.com\/?p=99164#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg","keywords":["BANK","break","Doesnt","Fed"],"articleSection":["Investing"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/fivemor.com\/?p=99164#respond"]}]},{"@type":"WebPage","@id":"https:\/\/fivemor.com\/?p=99164","url":"https:\/\/fivemor.com\/?p=99164","name":"The Fed Doesn\u2019t Want to Break the Bank - Som2ny Network","isPartOf":{"@id":"https:\/\/fivemor.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/fivemor.com\/?p=99164#primaryimage"},"image":{"@id":"https:\/\/fivemor.com\/?p=99164#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg","datePublished":"2025-02-20T09:49:07+00:00","breadcrumb":{"@id":"https:\/\/fivemor.com\/?p=99164#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/fivemor.com\/?p=99164"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/?p=99164#primaryimage","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/02\/AdobeStock_84970938-150x150.jpg","width":150,"height":150},{"@type":"BreadcrumbList","@id":"https:\/\/fivemor.com\/?p=99164#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/fivemor.com\/?bp_activities=1"},{"@type":"ListItem","position":2,"name":"The Fed Doesn\u2019t Want to Break the Bank"}]},{"@type":"WebSite","@id":"https:\/\/fivemor.com\/#website","url":"https:\/\/fivemor.com\/","name":"Som2ny Network","description":"Daily Deals","publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/fivemor.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/fivemor.com\/#organization","name":"Som2ny Network","url":"https:\/\/fivemor.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","width":300,"height":86,"caption":"Som2ny Network"},"image":{"@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","caption":"admin"},"sameAs":["https:\/\/fivemor.com"],"url":"https:\/\/fivemor.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/99164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=99164"}],"version-history":[{"count":0,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/99164\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/media\/99165"}],"wp:attachment":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=99164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=99164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=99164"},{"taxonomy":"dealstore","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fdealstore&post=99164"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fofferexpiration&post=99164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}