The Federal Reserve raised its key interest rate by a quarter-point in its effort to fight high inflation, despite concerns about potential negative impacts on the banking system. The Fed acknowledged that the turmoil stemming from the collapse of two major banks could tighten credit conditions and weigh on economic activity, hiring, and inflation. Additionally, the central bank signaled that it is likely nearing the end of its aggressive streak of rate hikes, and it expects to raise its key rate just once more. Although the Fed notes that hiring is robust, inflation remains elevated, indicating that it still has a way to go to combat high inflation.

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