Story by Irina Ivanova • 7h ago
The lightning collapse of three banks and financial industry rescue of a fourth has put a spotlight on the Federal Reserve's decision next week over whether to continue raising interest rates.
Just two weeks after Fed Chair Jerome Powell suggested rates could rise even higher than previously projected in a bid to quash inflation, many analysts expect a no more than 0.25 percentage-point hike, while some experts are urging policy makers to hold the line for fear of further unsettling the banking system.
The quandary highlights the multiple, and conflicting, issues facing the Fed. With key sectors of the economy going strong and inflation still more than double the Fed's target rate of 2%, the central bank is keenly aware that any sign it is relenting in the battle against inflation could give rise to another wave of price increases.