Silicon Valley Bank’s Failure May Lead to Smaller Fed Rate Hike

The second-largest bank failure in U.S. history might help the Federal Reserve do its job of tightening credit and slowing the economy.

To be sure, the sudden collapse of the Silicon Valley Bank unit of

SVB Financial Group

(ticker: SIVB) wasn’t part of the Fed’s plan. But it nonetheless seems an inevitable result of ending the era of free money that funded not only the technology sector, but also an array of other investments that suddenly have been made less viable by the prospect of short-term rates approaching 5%.