(Seoul = Yonhap Infomax) Reporter Kim Ji-yeon = A warning has been issued that if the Federal Reserve does not adjust the pace of rate hikes, bigger problems than Silicon Valley Bank (SVB) bankruptcy will occur.
According to CNBC on the 13th (local time), Brad Gerstner, CEO of Altimeter Capital, appeared on the air and mentioned that the 10-year Treasury yield fell due to the SVB crisis, saying, “The market is not controlling the pace of rate hikes with the Fed.” “If we don’t, we’re signaling that there will be a massive recession and more problems.”
The 10-year US Treasury yield, which was close to 4% earlier this month, fell nearly 20bp after the SVB crisis and closed at 3.518% the day before.
CEO Gerstner analyzed that the reason for the bankruptcy of VB and the sell-off of local banks was that the Fed had been aggressively raising interest rates since last year to control inflation.
“Fed Chairman Jerome Powell said last week that the economy was strong, but after a few days it became clear that America’s regional banking system was in trouble,” he said. said.
CEO Gerstner said, “We are currently at an inflection point in technological innovation,” and expressed concern that the banking crisis has extended to the startup ecosystem.
“The risk to local banks has moved beyond SVB to young startup founders,” he said. “The important thing is that their fundamental means of raising market funding disappeared overnight.”
He compared the current situation to the 2008 financial crisis and urged the Fed to adjust the pace of interest rate hikes, saying, “We are back to the starting point.”
jykim@yna.co.kr
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