The Fed didn’t cause SVB to fail, but its aggressive interest-rate increases over the past year exposed the risky side of the bank’s business and may have doomed it to failure. Now the Fed is under pressure to stop raising rates, at least until the fallout from the SVB collapse is more clear. Some worry more banks could succumb if the Fed sticks to its plan. Ye the still-strong increase in core inflation in February makes it harder for the Fed to pause now. Just last week, Fed Chairman Jerome Powell even hinted that another jumbo rate hike was on the table. Senior central bank officials could make a game time decision. “The Fed and other hawkish central banks now have tough decisions ahead,” senior economist Priscilla Thiagamoorthy at BMO Capital Markets said before the CPI report. “Continue with more rate hikes to extinguish the inflation inferno or pause the process, at least briefly, to ensure financial stability.” The Dow Jones Industrial Average DJIA, 1.09% and S&P 500 SPX, 1.63% were set to open higher in Tuesday trades. Emergency steps by U.S. regulators to backstop the financial system appear to have turned the tide after last Friday’s selloff. NN: The system is broken… but the latest 1 trillion dollar bail out of loses in treasuries held by banks that are underwater will buy them time and even more inflation.