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The Economist — Economy — Inflation Chaos — Monetary Policy — Finance — Banking

Policymakers face two nightmares: stubborn inflation and market chaos

The Federal Reserve faces the challenge of balancing financial stability and inflation control as it raised interest rates and took measures to safeguard assets and liabilities in the banking system after the Silicon Valley Bank crisis. The impact of the crisis on the economy is real and could shave

1 min read
  • The Federal Reserve faces the challenge of balancing financial stability and inflation control.
  • The Fed raised interest rates by one-quarter of a percentage point to tackle inflation.
  • The Fed also took measures to safeguard assets and liabilities in the banking system.
  • The combination of Fed's lending and insurance has calmed things down after the Silicon Valley Bank crisis.
  • The impact of the crisis on the economy is real and could shave half a percentage point off annual GDP growth.
Policymakers face two nightmares: stubborn inflation and market chaos
The Federal Reserve grapples with a dilemma that will soon hit other countries | Finance & economics
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