Reuters
Inflation still a front-burner issue in the hectic Fed kitchen
Stubbornly high inflation, a robust job market, and an outbreak of financial stress have presented the Federal Reserve with a stark choice in the coming week: push ahead with interest rate hikes that could upend fragile markets or announce a pause that could weaken its unfinished fight against rising prices. Despite designating a recent U.S. bank collapse as a “systemic risk,” the U.S. central bank is currently expected to raise interest rates by another quarter of a percentage point at its March 21-22 policy meeting, with inflation still strong, the Fed’s inflation-fighting credentials on the line, and financial markets calmed – for now – by a new liquidity program for banks. Yields on Treasury bonds, meanwhile, increased as investors discounted the likelihood that the Fed would shy away from further rate increases.
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