Fed Set to Raise Interest Rates by 0.25 Percentage Points

The Federal Reserve is slated to raise interest rates for the 10th time in just over a year, as officials continue their fight against inflation amid growing fears of a recession according to a report by The Washington Post.

At the conclusion of their two-day meeting Wednesday, the central bank is expected to announce a quarter-point hike, which would bring the Fed’s benchmark interest rate to a level between 5% and 5.25%.

Policymakers are expected to debate whether this May hike gets interest rates high enough to pause the Fed’s aggressive campaign against inflation and give time for their policies to work through the economy. Or they could decide they have more work to do to raise borrowing costs and curb demand for all kinds of investments, from mortgages to car loans to business hiring.

Complicating the Fed’s decision are the ongoing repercussions from this spring’s banking crisis. Fed officials have said the fallout from the failures of Silicon Valley Bank and Signature Bank will slow the economy. Tremors in the financial system have made banks more reluctant to loan money, curbing demand in a way that mimics an interest rate hike. But policymakers will need to debate — and then explain to the public — just how significant that broader slowdown will be.

Click here to read the full a report by The Washington Post.