by Wendell Husebo, Breitbart:
The Federal Reserve continued to increase interest rates by quarter of percent (25 basis points) on Wednesday, a decision subject to speculation by financial experts, as the central bank weighed reducing soaring inflation and the stability of the banking system.
The increase is the same point increase it implemented in February before the recent banking crises, though the 25 basis point increase in February was a reduction from the previous increases of 50 and 27 basis points respectively.
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Federal Reserve Board Chairman Jerome Powell. (MANDEL NGAN/AFP via Getty Images)
The Fed was stuck between a rock and a hard place. With the Fed increasing interest rates, banks could likely continue to struggle with liquidity and perhaps cause more bank failures. Not raising the interest rate would likely fuel inflation that previous interest rate hikes were intended to reduce.
According to Barron’s, past inflation and jobs data argued for continued increased interest rate hikes, while the recent banking crisis indicated a pause would be prudent.
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It appears the Fed’s Wednesday decision attempted to balance both concerns.
