Sheila Bair on risk of rising interest rates to the financial system

When interest rates rise, it creates instability.  My friend and dear mentor, Paul Volcker, was very critical of inflation targeting because the protracted period of accomodative monetary policy would inflate financial assets, inflate the value of stocks and bonds, and then when interest rates have to go up to fight inflation, the value of those assets go down...  There's this correction mechanism that can have instability ramifications on the financial system so I think and hope the regulators are on top it.  There's a lot more capital now in the banking system, but I'm still a little wary.  I think we need to learn more.

Sheila Bair, MSNBC interview, 5:40 mark, March 11, 2023