The Federal Reserve chair has lots of tools but a very tough challenge before him.
, commercial real estate enter a crisis phase, and crypto get boring again. But inflation is coming down, and the unemployment rate is staying low. In this context, Powell would probably say the consequences of the hikes have been worth it, yet it’s also clear that he and his colleagues have pushed rates about as high as they reasonably can and that yesterday’s meeting marked the beginning of a new phase for the Fed in managing this fragile but apparently still strong economy.
So far, the extent of the Fed’s bank management after the crash of Silicon Valley Bank in March is in special lending programs, which have given out hundreds of billions of dollars in cash and emergency loans so far. As a matter of economic policy, it is almost tweaking at the margins. This was supposed to not only keep banks from crashing but return them to their normal business operations of lending.
But this week, it feels as though everything has changed. Things are moving so quickly right now that the consequences of the Fed’s actions, or inactions, could be profound. The central bank has expansive powers to lend during emergencies — think of the bailouts of 2008 or the Paycheck Protection Program in 2020. It also has the power to require banks to hold more money in reserves, essentially cushioning against shocks.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Gold Price Forecast: XAU/USD bulls flex muscles as Federal Reserve announcements loomGold price (XAU/USD) seesaws at the highest levels in two weeks, making rounds to $2,015-20 during early Wednesday, after rising the most in a month t
Read more »
Here's what to expect from today's Federal Reserve announcementWhere the intrigue comes in is how the central bank proceeds from here.
Read more »
Federal Reserve confronts 'contradictory' economy today as it considers next interest rate hikeAs the Federal Reserve gets ready to make its latest about whether it will raise its key federal funds rate for the 10th consecutive time, finance commentators continue to disagree about how it should respond to economic conditions.
Read more »
Federal Reserve expected to raise interest rates 0.25%, investors debate next steps'When the Fed increases interest rates, it exposes any fissures in the financial markets or the economy....the recent tightening...contributed to the recent stress in the banking system,' said one economist. Fed is expected to raise interest rates 0.25%:
Read more »
Federal Reserve expected to raise key interest rate for 10th time amid banking turmoilSuch anxieties would argue against further rate hikes, at least for now.
Read more »