SPRINGFIELD, Mass. (WWLP) – A boost in the stock market Monday after investment bank UBS pulled a forced takeover of Credit Suisse through the Swiss government. All eyes will be on the Federal Reserve this week to see if they’ll raise interest rates.
“The fed should be very careful right now about raising interest rates again. Clearly that was part of the problem with Silicon Valley Bank and the signature bank and we don’t want to see that cascading into other financial institutions,” said Senator Ed Markey.
This comes after Silicon Valley Bank announced its closure, pointing towards higher interest rates. Those higher interest rates are aimed at combatting inflation, which has gone down to six percent, but typically it’s supposed to be around two percent.
Financial Advisor Mark Teed from Raymond James & Associates said the risk with the Fed not raising the interest rate, it could signal the economy is weaker than we thought, “If he does raise rates, he puts a lid on that saying economy is still doing pretty well, inflation is a little higher than we want.”
However, Teed said this situation doesn’t put the average person’s bank account at risk, “This is a .1% problem. The average person shouldn’t worry about this at all. FDIC insurance covers them and they opened it up at this moment, it looks like it will all be covered.”
Teed added that raising interest rates could also show that what we’re seeing with Silicon Valley Bank is more an isolated incident. Teed sees what happened to Silicon Valley more as a mismanagement of risk internally that was caught early by the Feds.