It is the unknown unknowns that puzzle the most, because there is never a single cockroach. After a year of significant central bank interest rate hikes, the collapse of Silicon Valley Bank has raised concerns that higher bond yields and lower prices may not have been sufficiently recognized or covered in recent years. less visible private sectors of the economy and the banks that serve them It’s pretty amazing that with US short-maturity yields shooting up in a straight line to 5% from zero, we haven’t had more incidents of skinny dipping, but with the tide still far offshore, more naked swimmers may still reveal themselves. .
There was an early warning siren six months ago in the UK about how unexpected aftershocks could be triggered suddenly by major global bond appreciation. But the resolution of that crisis offers a reassuring example of how this latest systemic wake-up call might be resolved.
