The Federal Reserve raises its benchmark rate by 0.25 point, balancing fight against inflation with risks to banking system
Financial markets expected the move, which brings the Fed’s base policy rate to between 4.75 and 5 percent.
The Fed likes a plan. But recently its attempts to look ahead have been thwarted, by a global pandemic and war in Ukraine. Now the rapid interest rate increases of the last year are also contributing to a worrisome degree of instability in the financial system. The collapses of Silicon Valley Bank and Signature Bank prompted all-out interventions from the Fed and thenew attention on financial regulation, especially since SVB implodedIt has also put the Fed — which works hard to maintain its independence — under a harsh political spotlight. Earlier on Wednesday, Sens. Rick Scott and Elizabeth Warren unveiled legislation that would replace the Fed’s watchdog with an inspector general appointed by the president and confirmed by the Senate.
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