Fed Rate Path Hinges on Trade-Off Between Stable Banks or Prices
- Powell: Tight credit means rates may not need to rise as much
- Fed officials weighing impact of hikes on financial stability
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Federal Reserve policymakers are increasingly grappling with a critical question: How much should they weigh the adverse impact of their interest-rate hikes on banks against the goal of containing the fastest price increases in decades?
The answer will play a major role in determining whether the Fed is steadfast in keeping rates elevated through year-end as officials expect, or cuts them as traders are betting.