The Federal Reserve Raises Interest Rates for the Ninth Time in a Row, Citing High Inflation
The Federal Reserve announced today that it would raise interest rates by 0.25 percent, marking the ninth consecutive hike in a year.
Despite low unemployment, the Fed is concerned about high inflation, which is currently running at six percent.
The central bank stated that getting inflation back down to two percent will be a bumpy process that has a long way to go.
The Fed was cautious about raising rates too much, as three recent bank failures have raised concerns about the stability of the banking system.
Higher interest rates over the past year were a contributing factor to the collapse of Silicon Valley Bank, which suffered a big loss on bond sales.
Fed Chair Powell insisted that these failures were isolated cases and that the ranking system is sound and resilient, with strong capital and liquidity.
Wall Street’s key indices lost 1.6 percent following the announcement.
Had the Fed not raised rates, the markets might have inferred that more banks are at risk.
The Fed’s regulators are under fire for failing to recognize warning signs before it was too late.
The Fed Chair promised a thorough review and emphasized the need to strengthen bank supervision and regulation to prevent a repeat of the failures that have undermined confidence in the banking system.
The Fed’s decision to raise interest rates comes amidst growing scrutiny and criticism.
However, Powell emphasized that their only interest is to identify what went wrong and prevent future failures.
The NBC News app provides breaking news and the latest updates on this developing story.
