Collapse of Silicon Valley Bank, Signature Bank Calls Fed Interest Rate Path Into Question

There is a saying that the Federal Reserve raises interest rates until something breaks. A big surprise over the past year had been that nothing broke.

No more. A sharp selloff in regional bank stocks Monday following the collapse of Silicon Valley Bank and Signature Bank risks pushing the Fed uncomfortably close to the one place it wanted to avoid over the past year: resolving a financial-stability trauma at the same time it fights high inflation.