The regional banking crisis could slow the U.S. economy even as deposits stabilize, the Fed chair said.
"Financial conditions seem to have tightened, and probably by more than the traditional indexes say. ... The question for us though is how significant will that be — what will be the extent of it, and what will be the duration of it," Powell said.
"We'll be looking to see how serious is this and does it look like it's going to be sustained. And if it is, it could easily have a significant macroeconomic effect, and we would factor that into our policy decisions," he added.on Wednesday, but its projections called for just one more hike over the rest of the year.
, making it the second largest failure in U.S. history, in part because the rapid rise in interest rates devalued its bond portfolio and created large paper losses for the bank. SVB's management "failed badly" in managing its interest rate risks, while other banks have managed to handle the hikes, Powell said.
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Fed's Powell faces political storm, policy minefield over SVB oversightThe Federal Reserve is expected to raise interest rates by a quarter of a percentage point on Wednesday, a decision that will land amid a brewing political storm over the U.S. central bank's oversight of collapsed Silicon Valley Bank and with the financial world hanging on the words of one man: Jerome Powell.
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Powell speech: Speed of run on SVB suggests need for possible regulatory changesFOMC Chairman Jerome Powell comments on the policy outlook after the Federal Reserve's decision to raise the policy rate by 25 basis points to the ran
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SVB Financial Group accuses FDIC of cutting it off from cashSVB Financial Group said on Tuesday the U.S. Federal Deposit Insurance Corporation had taken 'improper actions' to cut it off from cash held at its former subsidiary Silicon Valley Bank, which was seized by regulators to stem a national bank run.
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SVB Financial says FDIC has seized almost $2 billion of its deposits: reportThe parent company of failed Silicon Valley Bank cannot access about $2 billion in its deposits to the bank because the company's accounts were frozen by...
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Janet Yellen: SVB collapse is 'very different' than 2008 financial crisisTreasury Secretary Janet Yellen said the SVB collapse is 'very different' from the 2008 crisis and that the financial system is 'significantly stronger than it was 15 years ago'
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SVB Financial says FDIC improperly blocked it from accessing $2BSVB Financial accuses FDIC of 'improper actions' to block the firm from accessing $2 billion of its cash
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