important point
- The Federal Reserve has raised interest rates by 0.25%
- Federal interest rates are currently in the range of 4.75% to 5%.
- The Fed’s decision came on the heels of the second-largest bank failure in US history.
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Despite the failure of the Silicon Valley Bank, the Federal Reserve has opted to continue tightening financial conditions in the United States.
4.75% to 5% range
The Federal Reserve is pushing to fight inflation.
The US Central Bank announced today at the Federal Open Market Committee that it will raise the federal interest rate by 25 basis points to a range of 4.75% to 5%.
The Fed began aggressively raising federal interest rates in March 2022 after being criticized for not taking inflation concerns seriously. In doing so, the central bank raised its borrowing costs, resulting in an appreciation of the US dollar. Initially, the Fed said he would hike multiple 75 basis points at a fast pace throughout 2022, but slowed at the end of the year, with a 50 basis point hike in December and a 25 basis point hike in February 2023. stayed in .
Nevertheless, inflation is still at 6% year-on-year, according to the latest CPI print, well above the 2% target often stated by Federal Reserve Chairman Jerome Powell.Powell indicated As such, the central bank announced on March 7 that it was considering resuming aggressive rate hikes.
but The collapse of Silicon Valley Bank (and the plight of other local banks) has raised concerns about the resilience of the U.S. banking sector in a high interest rate environment, as the Federal Reserve is forced to intervene and guaranteed depositors complete.
Disclosure: At the time of writing, the author of this work owned BTC, ETH, and several other crypto assets.
