Federal Reserve Chair Jerome Powell and his colleagues this week face one of their toughest calls in years: whether to raise interest rates again to fight stubbornly high inflation or take a timeout amid the most intense banking crisis since 2008.
The decision over whether to raise interest rates by a quarter-percentage point is likely to hinge in part on how markets digest the forced marriage Sunday of two Swiss banking giants, UBS and Credit Suisse , and other steps to calm fears of contagion in the banking system. Fed officials’ two-day meeting concludes Wednesday.
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