Despite concerns about the recent banking crisis, the Federal Reserve increased the benchmark federal funds rate by 0.25% and acknowledged the potential for the banking crisis to harm the weak economy. Moreover, the chances of a recession this year remain high.
The Federal Reserve on Wednesday enacted a quarter percentage point interest rate increase while expressing caution about the recent banking crisis. This is the central bank’s ninth instance of raising rates since March 2022, and it’s the first announcement made after the recent troubles in the banking industry.
The hike brings the benchmark federal funds rate to a target range of 4.75% to 5%.
Moreover, following the rate hike announcement, Larry Summers, former Treasury Secretary, said…
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