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The Journal.

Why the Fed Raised Interest Rates Amidst a Banking Crisis

The Journal.

The Wall Street Journal

News, Daily News, Business News

4.25.8K Ratings

🗓️ 23 March 2023

⏱️ 15 minutes

🧾️ Download transcript

Summary

Over the past year the Federal Reserve has been steadily raising interest rates to try to bring down inflation. But the recent banking crisis has thrown a wrench into its plans. WSJ’s Nick Timiraos explains how the Fed is now trying to fight two problems at once. Further Reading: - Fed Raises Rates but Nods to Greater Uncertainty After Banking Stress Further Listening: - What Just Happened at Credit Suisse? - Can the Government Contain a Banking Crisis? - The Economy Is Too Hot for the Fed Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

The Federal Reserve meets eight times a year to decide whether to adjust interest rates.

0:11.4

And at each of the last eight meetings, the Fed has raised interest rates in hopes of

0:16.3

bringing down inflation.

0:18.4

But heading into the Fed's meeting this week, no one was quite sure what the Fed was

0:23.0

going to do.

0:24.4

Raise rates again, or finally step on the brakes.

0:28.5

Here's our colleague, Nick Timmeros.

0:30.2

I've covered the Fed for the Wall Street Journal for six years.

0:33.9

And we've never had a situation like this one where the decision was so up in the air

0:40.4

bleeding right into the meeting.

0:43.2

We are expecting another decision from the Federal Reserve Wednesday on interest rates.

0:48.1

Federal Reserve faces a tough decision today about whether to continue raising interest

0:52.6

rates.

0:53.6

This historic day, just a few minutes now, from the biggest Fed decision on interest rates

0:57.2

in some year.

0:58.2

The most important Fed decision in recent memory now, less than 15 minutes away.

1:04.7

The reason there was so much suspense around this meeting is because the Fed is now dealing

1:09.1

with a new problem.

1:11.4

They aren't just fighting inflation anymore.

1:13.2

They're also fighting a banking crisis after two banks collapsed and others continue

1:18.2

to face pressure.

1:20.2

So the Fed has two problems on its hands, inflation and a banking crisis, which one is worse?

...

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