Fed announces rise to a range of 4.75% to 5% – its ninth consecutive rate rise and the highest rate since 2007
by 0.5 percentage points last week even as the banking crisis rocked Credit Suisse, Switzerland’s second biggest bank. Inflation in the eurozone is averaging 8.5% and was likely to remain high “for too long” without continued rises, the bank said.6% higher
in February than they were a year ago, markedly lower than the 9.1% annual rate of inflation recorded last June but still a long way from the Fed’s target of 2%. Before SVB’s collapse Powell told a Senate banking committee: “Although inflation has been moderating in recent months, the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”
After Powell’s testimony analysts speculated that the Fed could increase rates by another 0.5 percentage points after its March meeting. But those calculations were thrown off by the banking crisis. Following SVB’s collapse New York’s Signature Bank experienced a similar crisis as worried depositors pulled their funds. Last weekend Swiss authorities brokered a deal to sell troubled Credit Suisse to larger rival UBS. Wall Street’s biggest banks have had to step in to prop upThe Fed’s latest statement did hint that its rapid series of rate rises may be drawing to a close.
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