Don’t Get Your Hopes Up: SVB's Demise Won't Bring Interest Rates Down

Don’t Get Your Hopes Up: SVB’s Demise Won’t Bring Interest Rates Down

That would leave the Fed holding Treasury bonds that might not regain their market value for years, or even decades. The Fed doesn’t face the same duration risk as private banks, so it can afford to hold, even all the way to the bonds’ 10-, 20- or 30-year maturities, when their face value can be redeemed from the U.S. Treasury Department.

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