“On Wednesday, the Federal Reserve raised interest rates another quarter point in regulators’ ongoing bid to reduce inflation. It’s a move that marks the Fed’s 10th straight rate hike and it’s one that’s proven contentious given fears that it could slow the economy too much.
The rate hike — which puts the Fed’s benchmark rate between 5 to 5.25 percent — comes as another mid-size bank, First Republic Bank, failed and was later acquired by JPMorgan Chase, becoming the second-largest bank failure in US history. The Fed favors the hike because it’s continuing to fight inflation, which has dipped substantially in the last year. At 5 percent, inflation is still higher than the Fed’s target rate of 2 percent.
Economists and experts who oppose raising rates, however, say inflation is already showing signs of slowing, and that additional rate increases could add even more challenges for small businesses and lead to a harmful uptick in unemployment.”
https://www.vox.com/2023/5/3/23709902/federal-reserve-interest-rate-hike-recession