Late last week, drama hit the world of banking and finance.

Regulators have seized the assets of one of Silicon Valley's top banks.

Silicon Valley Bank's failure was the second biggest in U.S. history, followed Sunday by

the third biggest when signature bank failed. Treasury Secretary Janet Yellins trying to reassure Americans,

there won't be a domino effect, like the meltdown in 2008. Within days, the federal government

stepped in with sweeping measures to shore up the U.S. banking system and assure people that their

money was safe. Americans can rest assured that our banking system is safe.

Your deposits are safe.

Let me also assure you we will not stop at this.

We'll do whatever is needed.

But the failure of Silicon Valley Bank and two others couldn't have come at a worse time.

For the past couple of months, the tech and startup industries have cut tens of thousands

of jobs, and the Federal Reserve has tried to tame inflation by hiking interest rates.

If that's the one thing you know, you know that this committee is committed to getting to

a meaningfully restrictive stance of policy and staying there until we feel confident that inflation is coming down.

Controlling the economy is a delicate balance, of course. And when inflation has been high,

the Fed's best course of action historically has been to raise interest rates. But in times

of economic uncertainty and risky banking practices, raising rates could cause an overcorrection and spark a recession.

There were some unintended consequences of those interest rate hikes intended to reign in inflation.

The Federal Reserve is set to meet early next week to decide its next move.

Will Fed-Chair Jerome Powell decide to fight higher prices or stabilize the banking system?

I'm Gustavo Ariano. You're listening to the Times.

...