Fed hikes interest rates 0.25 point amid global banking turmoil

The U.S. Federal Reserve (Fed) raised interest rates on Wednesday by a quarter percentage point for the ninth time in a row, despite the recent turmoil in the banking sector but signalled it may soon call time on its monetary tightening campaign.

The Fed is anticipating another quarter-point increase to a break range of 5 to 5.25 percent, in line with its December estimate and lower than the level markets expected before SVB’s disaster, according to the officials’ median estimate.

The Fed acknowledged recent strains in the nation’s banks and said they will soften the economy but added the financial system is stable, according to its statement published after a two-day meeting.

Jay Powell, Fed chairman said the measures taken in response to the failures — including a guarantee for all deposits held at the two lenders and a new Fed lending facility — demonstrate that all depositors’ savings are safe.