The Federal Reserve concluded two days of meetings on Wednesday by deciding to increase interest rates .25%.
While another interest rate hike was considered likely, recent rank runs have brought into question whether the Federal Reserve would continue raising interest rates. Federal Reserve Chair Jerome Powell has stated that the board’s goal is to get the annual rate of inflation down to 2%. "The U.S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation.
Since last year, the Fed has increased the Federal Funds rate from 0.75%–1% to 1.5%–1.75%. After a series of interest rate increases, the rate now stands at 4.75%–5%, its highest mark in 15 years. "Over the past year, we have taken forceful actions to tighten the stance of monetary policy," Powell said days before Silicon Valley Bank collapsed."We have covered a lot of ground, and the full effects of our tightening so far are yet to be felt. Even so, we have more work to do.
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