Former Secretary of Labor Alex Acosta told Newsmax on Monday that "we have now seen this year 3 of the 4 largest bank failures in U.S. history, 3 of the top 4 just this year" following the collapse of First Republic Bank.
Regulators seized First Republic Bank and sold most of its operations to JPMorgan Chase following First Republic's sudden collapse following the failure of Silicon Valley Bank. Acosta noted on "National Report" that First Republic "was expected certainly last week, First Republic's been having difficulties ever since the Silicon Valley Bank failure."
The former secretary went on to say that although the bank's failure "doesn't affect individuals directly, if they don't have money, it affects all of us indirectly. The FDIC has spent so far this year about 35 billion in bailing out Silicon Valley and First Republic and dealing with these bank failures, and that goes to all of us."
He continued: "More importantly, there any number of banks out there that … have troubled balance sheets, and they have troubled balance sheets because they have bond holdings and those bond holdings were purchased before we saw the recent increase in interest rates before we saw inflation, and those bond holdings are underwater."
Acosta also addressed the Federal Reserve and expectations that the Fed with raise interest rates.
"I personally believe that they're going to raise rates yet again," he said. "If they do, this is the 10th interest rate increase … but they face a really difficult decision because the Federal Reserve minutes show that they expect a recession" despite improved inflation figures.
Acosta said that inflation "isn't improving nearly as quickly as they'd like … so the Federal Reserve has to be thinking, If the administration doesn't take a step back and reduce spending, we have no choice but to focus on inflation."
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Theodore Bunker ✉
Theodore Bunker, a Newsmax writer, has more than a decade covering news, media, and politics.
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