Yellen: "Need for Additional Rate Hikes May Disappear"

Cautious Banking Policies Amid SVB Aftermath

U.S. Treasury Secretary Janet Yellen stated that due to the cautious policies banks are adopting following the collapse of Silicon Valley Bank (SVB), the need for further interest rate hikes may disappear.

According to foreign media on the 15th (local time), Secretary Yellen said in an interview with CNN that policy measures taken to prevent the fallout from the recent failures of SVB and Signature Bank have stabilized deposit outflows and calmed the situation.

Janet Yellen, U.S. Secretary of the Treasury. [Photo by Yonhap News]

Secretary Yellen noted that banks, which had already been tightening lending standards, may further restrict lending as a result of this incident. She added, "(This movement) could replace the need for additional interest rate hikes by the Federal Reserve."

Secretary Yellen also stated that she has not yet seen sufficient changes to alter her existing economic outlook. She said, "I expect the outlook to remain that inflation will ease while the economy grows moderately and the labor market remains strong."