For the second time this year, the Federal Reserve is gearing up to raise interest rates right after a bank failure
In this instance, the Fed’s decision this Wednesday will come just two days following the collapse of First Republic Bank, the second-biggest bank failure in US history. Like Silicon Valley Bank and Signature Bank, First Republic’s failure was precipitated by the central bank’s year-long rate hiking campaign. As rates went higher, investments the banks made — particularly in long-term bonds — devalued, leaving lenders sitting on billions of dollars in unrealized losses.
To do that, it has to intentionally slow parts of the economy by making it more expensive for banks, and thereby consumers, to borrow money. But it’s a delicate balancing act between lowering inflation and causing a recession. In the 1970s and early 1980s, the Fed flip-flopped between raising interest rates to get inflation under control and lowering rates to spur economic activity. This form of monetary policy, often referred to by economists as “stop-and-go,” was disastrous for the economy.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
Federal Reserve's employee stock trading rules not strict enough: Agency watchdogThe federalreserve does not have enough restrictions on how employees trade in the stock market despite the agency having some of the most rigid staff rules, according to a government watchdog.
Consulte Mais informação »
Deregulating Banks Is Dangerous.JohnCassidy writes about First Republic Bank’s sale to JPMorgan Chase, and why Congress should restore the Dodd-Frank regulatory standards for all banks with more than $50 billion in assets.
Consulte Mais informação »
Stock futures fall slightly as investors look ahead to Fed rate decision: Live updatesInvestors looked ahead to the Federal Reserve's latest policy decision.
Consulte Mais informação »
Margot Robbie Showed The Reason Why Why Cindy Crawford Continues To Be a Fashion IconMargot Robbie's stunning MetGala look paid tribute to the iconic, Cindy Crawford.
Consulte Mais informação »
Why CNN Gave Trump a Prime-Time Town Hall—And Why Trump AcceptedThe network says it’s treating Trump like any other presidential candidate—but what does that look like for an indicted election truther?
Consulte Mais informação »