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Silicon Valley Bank bankruptcy sparks fears in the market; interest rates remain

A warning signal was turned on after the bankruptcy of Silicon Valley Bank (SVB), last Friday (10), and the financial market is extremely cautious.

In a quick response, the US government has ensured that taxpayers will not fund any of the damage containment measures – including because a new economic shock is among the main concerns of President Joe Biden, who is about to announce his candidacy for re-election.

In the wake of the SVB, US regulators also closed Signature Bank, another institution that was threatening to collapse. The Treasury Department guarantees that there is no systemic risk for the banking sector, but some doubts still persist.

For the Minister of Finance, Fernando Haddad (PT), the action of the Federal Reserve (Fed, the US central bank) to guarantee depositors was positive, but the information is not yet available. enough to know the size of the problem. He classified the situation as “serious” and also revealed that he is in contact with the president of the BC, Roberto Campos Neto, to assess the possible impacts on the Brazilian credit market.

In the meantime, discussions about lowering interest rates both here and in the US have grown. Last week, Fed Chairman Jerome Powell spoke of accelerating the pace of interest rate growth and even raising more than expected, depending on the outcome of economic indicators.

This Tuesday (14), consumer inflation data from the United States may shed light on the path that the monetary authority can follow. Here, the expectation surrounding the release of the new fiscal framework follows, amid yet another meeting between Haddad and part of the economic wing — this time, including the vice president and minister of Industry and Commerce, Geraldo Alckimin (PSB).

Presented by Muriel Porfiro, the CNN Money it presents a balance of the news subjects that influence markets, finances and the direction of society and the dynamics of power in Brazil and in the world.

*Posted by Tamara Nassif

Source: CNN Brasil

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