Fed minutes to detail debate in the wake of SVB, Signature bank failures
Detailed minutes of the U.S. Federal Reserve’s meeting last month due out Wednesday may show just how close the central bank came to postponing further interest rate increases following the failure of two U.S. banks in the days leading up to the session.
The Fed ultimately raised the benchmark federal funds rate a quarter of a point at its March 21-22 meeting, a policy gathering held less than two weeks after a tense weekend that top U.S. officials spent designing emergency measures to halt a possible deposit run against regional lenders following the failures of Silicon Valley Bank and Signature Bank.
At a press conference following the meeting, Fed Chair Jerome Powell said a pause was considered, but policymakers ultimately judged they could respond to different problems with different tools: higher interest rates to continue fighting inflation while relying on oversight and liquidity programs to keep the financial system stable.
Citi analysts Andrew Hollenhorst and Veronica Clark said they expect the minutes, released at 2 p.m. EDT (1800 GMT), to reflect a balancing act that is likely to continue as officials prepare for the next meeting of the Federal Open Market Committee on May 2-3. Another quarter-point increase is expected, but policymakers have also said they are watching banking data closely for signs of stress or a larger-than-anticipated drop in lending.
This report’s information was first seen on REUTERS; to read more, click this link.