Fed Chairman Jerome Powell and Treasury SecYellen gave diverging answers to questions about whether the government would guarantee bank deposits over the FDIC's limit. Some lawmakers have been wondering whether the FDIC’s $250,000 cap is too low.
Following the collapses of Silicon Valley Bank and Signature Bank, some lawmakers in both parties have been wondering about whether the Federal Deposit Insurance Corporation’s $250,000 cap should be raised.Those seeking a clear and unified message from the Treasury and Fed didn’t get one on Wednesday after the central bank’s decision to hike rates once again.
During his remarks to reporters after the Fed’s 0.25 percentage point rate hike, Powell stressed that depositors’ savings in the banking system are safe. The Dow Jones Industrial Average closed down more than 500 points Wednesday. The tech-heavy Nasdaq and the S&P 500 both plunged by more than 1.6%. Meanwhile, the Chicago Board Options Exchange Volatility Index, better known as VIX but also as the “fear index,” was up more than 4.5% around the time that markets closed on Wednesday.
Sen. Elizabeth Warren said Sunday that raising the limit has “got to be on the table right now” amid the turmoil in the banking sector.
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