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Fed Hikes Rates Despite Ongoing Banking Crisis, Cites High Inflation Risk
The Federal Reserve raised its benchmark interest rate for the ninth consecutive policy meeting Wednesday, defying calls for a pause in tightening amid the ongoing U.S. banking crisis, adding that “additional policy firming” could still be needed in order to tame elevated inflation. The Fed’s new “Summary of Economic Projections” meanwhile, held to its forecast of a terminal Fed Funds rate of just over 5.1%, suggesting at least one more rate hike, even as officials indicated faster inflation estimates than in the December report. “The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” the Fed statement said.
