Fed Urged to Slow Down as Troubles for Tech-Focused Banks Mount


As the ramifications of Silicon Valley Bank’s collapse continue to be felt, Brad Gerstner of Altimeter Capital has warned the Federal Reserve that they need to decelerate or else “plenty more stuff is going to break.” On the Halftime Report on CNBC Monday, Gerstner remarked that it was clear by Thursday that the entire regional banking system was in turmoil, leaving room for a lot of questions. Three noteworthy banks specializing in tech or cryptocurrency have been either shut down or liquidated in the past week.

Gerstner stated that it was not his intention to blame Fed Chair Jerome Powell, but he noted that the regulator had said on Tuesday that everything was fine, only for the situation to take a dramatic turn for the worse in the following days. He also indicated that the issue goes beyond the startup world and is a national banking issue. He remarked that the market was making it clear to the Fed that they need to reduce speed, or there would be a major recession and much bigger issues.

The investor said that the main source of funds for the market suddenly disappeared, and he compared the current situation to the financial crisis of 2008. He explained that the Federal Reserve’s efforts to reduce inflation resulted in the banks being thrown into disarray.

The yield on the 10-year Treasury dropped to 3.50% on Monday, having previously gone above 4% this month, reflecting the market’s message to the Fed to reduce speed. Gerstner concluded that if the Fed does not slow down, “a lot more stuff is going to break.”

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