The accidents have started

The failure of SVB was due to idiosyncratic reasons, but shows how higher rates can expose fault lines in unforeseen places

Over the past several months, as interest-rate expectations have risen rapidly, we have worried about the risk of “accidents” — failures of firms, which can freeze financial markets.

Economic forces are mostly self-adjusting — a rise in interest rates to fight inflation can slow the economy, and once inflation is lower, rates can fall again. This is akin to us standing on a hill and planning to move to another hill: If all goes well, we can land at the same or better place. The challenge is in crossing the valley in between. As former Fed chairman Ben Bernanke