The Federal Reserve raised its benchmark interest rate by a quarter percentage-point in an effort to curb high inflation. Some had called for the Fed to wait after two recent bank failures.
Consumer prices in February were 6% higher than a year ago, as inflation continues to ease. The data comes just days after the collapse of two regional lenders is roiling the banking system.
Some say the decision to guarantee deposits beyond the typical $250,000 limit was necessary to keep the financial system stable. Others argue this sets a bad precedent if other banks run into trouble.
Speaking before the Senate Banking Committee, Powell warned the central bank may have to raise interest rates even more, sending stock markets sharply lower.
Americans began the new year with a spending spree, but businesses are not sure how long it can last. There's a lot riding on the answer, since consumer spending is the backbone of the U.S. economy.
Annual inflation cooled in January for the seventh month in a row. But price increases accelerated between December and January, fueled by rising shelter, food and gasoline prices.
The markets have rallied this year as investors believe inflation will continue to ease and that the economy will avoid a recession – but it could end in tears.
U.S. employers added 517,000 jobs in January, as the unemployment rate fell to 3.4% . The job market remains tight, despite signs of a slowing economy.