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2023/03/23 / Erste Group Research

US Fed responds to bank turmoil

As had been widely expected, the responsible body of the US Fed (FOMC) decided to raise the range for the key interest rate by 25 basis points (bp) to 4.75-5%. As a result of the recent turmoil in the US banking sector, the FOMC expects more restrictive lending and thus effects on the economy, employment and inflation. Thus, the impact would be the same as from rate hikes. However, according to Fed Chairman Powell, the extent cannot be estimated at present. For the further development, the FOMC therefore assumes that only some additional monetary policy tightening may be appropriate to bring inflation to the 2% target.

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General information

AuthorErste Group Research
Product nameShort Notes Major Markets
Topic in focusMacro/ Fixed income
Economy in focusUnited States
Currency in focusUS Dollar
Sector in focus-


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