The Federal Reserve extended its yearlong fight against high inflation Wednesday by raising its key interest rate a quarter-point despite concerns that higher borrowing rates could worsen the turmoil that has gripped the banking system.
"The U.S. banking system is sound and resilient," the Fed said in a written statement released after its two-day meeting.
The latest rate hike suggests that Chair Jerome Powell is confident that the Fed can manage a dual challenge: Cool still-high inflation through higher loan rates while defusing the financial upheaval in the banking sector through emergency lending programs and the Biden administration's decision to cover uninsured deposits at two failed U.S. banks.
In its statement, the Fed included some language that indicated that its fight against inflation is still far from complete. It said that hiring is"running at a robust pace" and noted that"inflation remains elevated." It removed the phrase,"inflation has eased somewhat," which it had included in its statement in February.
Most Fed watchers expect the central bank to announce on Wednesday afternoon a relatively modest quarter-point hike in its benchmark rate, its ninth increase since March of last year. Yet for the first time in recent memory, there remains some uncertainty about what the Fed will announce when it issues its policy statement at 2 p.m. Eastern time.
Given the heightened uncertainties overhanging the financial system, there's a small chance that the Fed could decide not to issue its usual quarterly projections. Three years ago, when the pandemic struck, the Fed moved up a scheduled policy meeting to a Sunday, rather than on Tuesday and Wednesday, to urgently address the economic anxieties caused by new pandemic restrictions. After that meeting, the Fed didn't release any quarterly projections.
Not this time. The Fed is expected to treat inflation and financial turmoil as two separate problems, to be managed simultaneously by separate tools: Higher rates to address inflation and greater Fed lending to banks to calm financial turmoil.
Österreich Neuesten Nachrichten, Österreich Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Here's everything the Federal Reserve is expected to do WednesdayThe Fed will close its two-day meeting Wednesday with a heavy air of uncertainty.
Weiterlesen »
Live Fed updates: Federal Reserve will announce key rate decision Wednesday afternoonThe Federal Reserve will announce its decision on interest rates Wednesday afternoon. Markets anticipate the central bank will enact a 25 basis point rate hike.
Weiterlesen »
Housing Market: Mortgage Rates Sink To 5-Week Low Amid Bank HavocThere may not be much time to rejoice if the Federal Reserve increases interest rates Wednesday.
Weiterlesen »
Fed hikes rates by a quarter percentage point, indicates increases are near an endThe Federal Reserve on Wednesday released its decision on interest rates following a two-day meeting.
Weiterlesen »
Federal Reserve raises benchmark rate by 0.25 point despite bank turmoilThe Federal Reserve raises its benchmark rate by 0.25 point, balancing fight against inflation with risks to banking system
Weiterlesen »
Federal Reserve hikes its key interest rate a quarter pointBREAKING: The Federal Reserve is raising interest rates a quarter point, continuing its efforts to quash inflation.
Weiterlesen »