Federal Reserve Unveils Quarter-Point Target Interest Rate Hike As Banking System Reels

Officials at the Federal Reserve announced a 0.25% increase in the target federal funds rate on Wednesday, marking a slowdown from previous rate hikes meant to combat inflation, even as the financial sector contends with the collapse of three medium-sized regional banks. Rate hikes increase the cost of borrowing money, decreasing inflationary pressures as consumers and businesses assume less debt but simultaneously slowing the economy. Federal Reserve officials formerly set interest rate targets as low as 0.0% during the lockdown-induced recession to stimulate economic activity; rate targets now sit between...