Noted economist Ed Hyman of Evercore ISI said the Federal Reserve should consider pausing interest rate hikes in part because of the financial shock that has developed with Silicon Valley Bank. “It might be a good idea for the Fed to take a break,” Hyman wrote in a Sunday note, citing the SVB’s failure along with sluggish inflation data. “If the Fed were to relax and inflation would accelerate, it could easily tighten again.” The Fed raised rates eight times in the last 12 months and is expected to do it again on March 22. When the Silicon Valley Bank crisis opened there, investors quickly reduced their bets for half a percentage point rise in the meeting and instead saw only a quarter point increase. The Dow Jones Industrial Average posted its worst week since June and 2-year Financial results posted their biggest 2-day decline since the financial crisis as SVB financials closed last week and regional bank shares fell due to sympathy. “Financial shocks/crises are part of the tightening cycle and the resulting business cycle. We have,” Hyman wrote. Regulators Sunday reportedly held an auction for Silicon Valley Bank and traders hope that part of the plan includes making most of the depositors whole, investors will calm down and the stock market can recover. Though Hyman said it may not be easy and the Fed’s pause may be the last to stabilize the market. The economist noted that it took five weeks for the Fed to cut rates after the Long-Term Capital Management implosion in 1998. “During that week, the S&P declined 5%,” Hyman said. “So even if we are at a turning point, we may not be out of the woods. It may take the Fed a month to react.” —With reporting by CNBC’s Michael Bloom