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Fed’s tough challenge: Confront inflation and bank jitters

KIFI

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — Still grappling with persistently high inflation, the Federal Reserve faces an entirely new — and in some ways conflicting — challenge as it meets to consider interest rates this week: How to restore calm to a nervous banking system. The two simultaneous problems would normally push the Fed in different directions: To fight elevated inflation, it would raise its benchmark rate, perhaps substantially, for the ninth time in the past year. But at the same time, to soothe financial markets, the Fed might prefer to leave rates unchanged, at least for now. Most economists think the Fed will navigate the conundrum by raising rates by just a quarter-point when its latest policy meeting ends Wednesday.

Article Topic Follows: AP National Business

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