“Financial system troubles that drove the central bank to provide large amounts of credit to banks is not collateral damage from the Fed’s aggressive effort to lower inflation,” Federal Reserve (Fed) Bank of New York President, as well as Fed’s Vice Chairman of the rate-setting committee, John Williams said on Monday, per Reuters.

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I personally don’t think the pace of rate increases was behind the issues at the two banks back in March.

Viewed the trouble at the two banks as unique in nature and unlikely to reflect broader trends in the financial system.

While past episodes of financial sector stress point to tightening credit, as it now stands, ‘we haven't seen clear signs yet of credit conditions tightening and we don't know how big this effect will be’ if it happens.

I don't really worry about the divergence.

I think part of it is because there is an expectation among many market participants and economists that the economy's going to slow even more than I expect.