They were also projecting rates would be low before they suddenly weren't. If the Fed projections were reliable, banks wouldn't be in this situation.
SVB didn't do anything to hedge its duration even well after the "inflation is transitory" period was over.
The Fed has been very explicit that they need to tighten labor market conditions. "Tighten labor market conditions" = "cause layoffs". That's how it works, they just can't say it out loud because it'll spook people. They can't bring down inflation until they raise rates high enough that companies start going under, and they have no incentive to lower rates unless actual bad things are happening in the real economy. (Remember also that when rates are high, the Fed has more room to cut when actual bad things do happen, because there's a floor at zero.)