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Markets at Risk of More Upheaval as Banking Uncertainty Persists

The SVB situation is a “timely reminder” that when the Fed is focused on reining in inflation with interest-rate hikes “it often ends up breaking things,” Capital Economics’ Chief North America Economist Paul Ashworth wrote in a note Friday. “Regardless of whether the problems show up first in the real economy, asset markets or the financial system, they can trigger an adverse feedback loop that develops into a hard landing, which takes down all of them.”

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