The US Federal Reserve raised the interest rate again on Wednesday, this time by 0.25 percent, despite the recent shutdown of Silicon Valley Bank and Signature Bank – the second-largest bank failure in US history.
Rescuers Bail Out SVB, Signature Bank, Credit Suisse
Around the same time, Swiss National Bank engineered an emergency rescue of venerable Credit Suisse, arranging a deal to purchase the bank by its competitor, UBS, when Credit Suisse began faltering as well.
Federal Reserve Chair Jerome Powell said during the announcement that at their meeting earlier in the day, officials had considered not raising the rates.
“We’ll be looking to see . . . how serious this is and does it look like it’s going to be sustained,” Powell told reporters at the briefing.
“It could easily have a significant macroeconomic effect, and we would factor that into our policies” for future adjustments.
The announced increase is the ninth consecutive rate hike by the Fed in a year as the central bank continues to fight rising inflation.
This week’s increase brings the benchmark federal funds rate into a range between 4.75 and five percent – its highest level since September 2007.