If you thought SVB was bad ... The Fed is sitting on unrealized losses of ~$1.2 trillion on their $8.3 trillion bond portfolio. And the Fed is losing money every day by paying $$$ to commercial banks via reverse repos.
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@WallStreetSilv Yes but those will become gains when rates go lower in the future or the bond market reprices so it doesn’t really matter.
@LStoerseth @WallStreetSilv Not so fast. Over leverage and tiny reserve ratios mean higher rates cause more systemic bank failures. The 2 choices are 1) try to stop inflation & kill the financial system in the process or 2) pivot to save the financial system & cause runaway inflation in the process