Federal Reserve Bank of New York president John Williams He reportedly said Monday that he didn’t think the pace of rate hikes caused it Crisis at the two banks as early as March.

What happened: The Deputy Chairman of Federal Committee of the Free Market referred to the errors of Silicon Valley Bank And signature bank.

According to a Reuters report, Williams said he viewed the crisis at the two banks as unique and unlikely to be a reflection of broader trends in the financial system.

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The central banker said that while previous episodes of stress in the financial sector point to tightening in lending, “we have not yet seen clear signs of tightening in credit conditions and we do not know how large that effect will be” if it does, the report said .

US markets ended on a mixed note Monday as investors and traders started the week on a cautious note ahead of Wednesday’s CPI data, which will set the course for the future Those of the Federal Reserve next political decision.

The SPDR S&P 500 ETF Trust SPY closed 0.1% higher during the Invesco QQQ Trust Series 1 QQQ 0.05% lost.

Inflation: Williams said he believes inflation will gradually decline over time, cooling to 3.75% this year and likely reaching the 2% target by 2025. The Fed official said he also sees a gradual rise in unemployment from the current low of 3.5% to between 4% and 4.5%.

The New York Fed President said he was not concerned about market expectations of rate cuts, although the central bank is currently pricing in an additional rate hike this year.

“I’m not really worried about the divergence,” Williams said. “I think part of that is because many market participants and economists expect the economy to slow down even more than I expect,” he said of the report.

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