Fed raises interest rates a quarter point

The Federal Reserve’s decision on Wednesday to raise interest rates for the ninth time since last March comes amid turmoil in the banking sector.

Fed Chairman Jerome Powell described the banking system as “sound and resilient,” despite the recent collapse of two banks—Silicon Valley Bank and Signature Bank—and the near-collapse of a third. Some analysts partially credit the collapse of Silicon Valley Bank to higher interest rates.

What does the economic forecast look like? The Federal Reserve said on Wednesday that inflation “remains elevated,” whereas last month it said inflation had “eased somewhat.”

The Fed projects it will issue one more interest rate hike this year before easing back.

This story originally appeared in WORLD. © 2023, reprinted with permission. All rights reserved.