The New York TimesThe New York Times

Low rates were meant to last. Without them, finance is in for a rough ride

By Jeanna Smialek

16 Mar 2023 · 6 min read

Editor's Note

"Whenever the Fed hits the brakes, someone goes through the windshield.” Beyond banks, there may be other vulnerabilities in the financial system after a decade of low rates, reports the NYT.

WASHINGTON — If a number defined the 2010s, it was 2%. Inflation, annual economic growth and interest rates at their highest all hovered around that level — so persistently that economists, the Federal Reserve and Wall Street began to bet that the era of low-everything would last.

That bet has gone bad. And with the implosion of Silicon Valley Bank, the United States is beginning to reckon with the consequences.

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