Powell Indicates Quarter Point Hike May Be Final Push
The Federal Reserve has raised interest rates by 0.25 despite recent instability in the financial sector.
Fed Chairman Jerome Powell indicated in comments following the decision to raise rates that it may be the final boost this year.
Analysts coming into the day had mixed opinions about what might happen with rates following the failure of Silicon Valley Bank, the state regulators’ seizure of Signature Bank in New York, and evidence across the sector of shaky ground for smaller to mid-size lending institutions, particularly those with ties to the tech sector.
The Fed’s move in March pushes the base rate range to 4.75% to 5%
Powell in answering questions at the meeting said there was discussion of pausing rate increases, but recent data showed that the economy is strong and the financial sector is stable. The result was the smallest possible increase to further abate inflation and hold of recession.
“Inflation pressures continue to run high. The process for getting inflation back down to 2% has a long way to go, and is like to be bumpy,” Powell said. “We understand that our actions effect communities, families, and businesses across the country.
“Everything we do is in service to our public mission,” he said. “We at the Fed will do everything we can to achieve our maximum employment and price stability goals.”
The Federal Reserve System is the central bank of the United States. It performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. The Federal Reserve…
- conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy;
- promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad;
- promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole;
- fosters payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments; and
- promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.
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