Fed Walks Tightrope Between Inflation and Bank Turmoil—but for How Long?
both resources and political capital. The Fed's strategy has so far been successful in avoiding a financial crisis.
The Federal Reserve is responsible both for the financial system as well as the macroeconomy. These are two jobs that require different tools in theory.
The Fed is determined to keep that separation of functions intact. It continued its campaign to slow down the economy and lower too-high inflation on Wednesday with a
quarter-percentage-point increase
In interest rates and a forecast for one more. It has been lending generously through its discount window to banks in the meantime.
To limit the damage
Two weeks ago, Silicon Valley Bank collapsed.