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Federal Reserve expected to raise rates

Federal Reserve Building Fed
Posted at 6:08 AM, Mar 22, 2023
and last updated 2023-03-22 09:15:58-04

The Federal Reserve chair Jerome Powell will announce a decision on another U.S. interest rate hike.

Economists said the Fed's repeated rate hikes are an attempt to curb inflation back down to the central bank's goal of around 2%.

The Federal Reserve has raised rates eight times since March 2022. The most recent increase was in February when they went up a quarter-point.

Another rise in interest rates would make credit cards, mortgages, and auto loans more expensive for Americans.

Some analysts say the collapse of two U.S. banks this month could cause the Federal Reserve to hold rates steady and give the U.S. economy some breathing room.

Treasury Secretary Janet Yellen, speaking at the American Bankers Association Tuesday, said the U.S. banking system remains sound.

"It's essential that Congress raise the debt ceiling and that they do it promptly in order not to inflict a truly catastrophic wound on our economy and financial system,” U.S. Treasury Secretary Janet Yellen said.

However, recent economic data still shows strength in the labor market and in consumer spending.

But some fear rising interest rates could make it harder for banks to lend money, hurting small businesses and other borrowers.