Officials have been aiming to balance the risk of a credit crunch with high price pressures, raising rates last month even amid forecasts for a "mild recession” later this year.
Officials at the U.S. Federal Reserve are making a calculated risk that, while the recent banking turmoil will likely slow the economy, it won’t mushroom into a broader financial meltdown.
The central bank looks set to increase its benchmark rate by 50 basis points in a downshift after four straight 75 basis-point moves to curb inflation.
Policy-sensitive two-year Treasury yields fell on Powell’s remarks, erasing increases on the day, and the dollar slipped in value against major rivals on foreign-exchange markets.
Fed officials hope to engineer a rare soft landing where growth moderates and inflation falls with a low cost to employment.
Policymakers have raised the benchmark lending rate another 75 basis points to a range of 2.25% to 2.5% and said they anticipate "ongoing increases” will be appropriate.
Powell said officials "anticipate that ongoing rate increases will be appropriate,” to cool the hottest price pressures in 40 years.
On Wednesday, the Fed raised interest rates by 50 basis points for the first time since 2000, and Chair Jerome Powell says similar moves are on the table for June and July.
The boom in cryptocurrencies and their underlying technology is becoming too big for central banks, long the guardian of official money, to ignore. Until recently, officials at major central banks were happy to watch as pioneers in the field progressed by trial and error, safe ...
