On March 22, 2023, the Federal Reserve raised its benchmark interest rate by a quarter percentage-point to just under 5%[3].
This was the ninth rate hike in a row from the Fed.
The Fed is continuing its campaign against high inflation despite stress in the banking industry following the collapse of two regional banks.
Some observers had urged the central bank to pause its rate hikes temporarily to assess the fallout from the collapse of Silicon Valley Bank and Signature Bank earlier that month. However, stress in the banking system appeared to ease in recent days.
The Fed’s decision to raise interest rates has implications for consumers. It will be more expensive to get a car loan, borrow money for a business or carry a balance on your credit card.
The Fed’s actions are an effort to curb high inflation.