The federal reserve extended its year-long fight against high inflation on Wednesday (22/3/2023), by raising its key interest rate by a quarter-point, despite concerns that higher borrowing rates could worsen. The turmoil that has gripped the banking system.
Speaking at a news conference Wednesday, Fed Chair Jerome Powell said, the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.
The Fed is deciding in effect, to treat inflation and financial turmoil as distinct problems. To be managed simultaneously by separate tools. Such as higher rates to tame inflation and greater fed lending to banks to calm financial turmoil.
