--- title: The Fed's Latest Interest Rate Hike Could Set Off a 'Domino Effect' in Regional Bank Failures | TIME description: The Federal Reserve reinforced its fight against high inflation Wednesday by raising its key interest rate by a quarter-point to the highest level in 16 years. But the Fed also signaled that it may now pause the streak of 10 rate hikes that have made borrowing for consumers and businesses steadily more expensive. canonical: https://time.com/video/DbZcwu9Z/ og:title: The Fed's Latest Interest Rate Hike Could Set Off a 'Domino Effect' in Regional Bank Failures og:description: The Federal Reserve reinforced its fight against high inflation Wednesday by raising its key interest rate by a quarter-point to the highest level in 16 years. But the Fed also signaled that it may now pause the streak of 10 rate hikes that have made borrowing for consumers and businesses steadily more expensive. og:url: https://time.com/video/DbZcwu9Z/ og:image: https://cdn.jwplayer.com/v2/media/DbZcwu9Z/poster.jpg?width=720 og:type: video.other twitter:card: summary_large_image twitter:title: The Fed's Latest Interest Rate Hike Could Set Off a 'Domino Effect' in Regional Bank Failures twitter:description: The Federal Reserve reinforced its fight against high inflation Wednesday by raising its key interest rate by a quarter-point to the highest level in 16 years. But the Fed also signaled that it may now pause the streak of 10 rate hikes that have made borrowing for consumers and businesses steadily more expensive. twitter:image: https://cdn.jwplayer.com/v2/media/DbZcwu9Z/poster.jpg?width=720 --- * U.S. # The Fed's Latest Interest Rate Hike Could Set Off a 'Domino Effect' in Regional Bank Failures > Sponsored content. 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They are at time.com/newsletters and are separate from a paid subscription. ## Video: The Fed's Latest Interest Rate Hike Could Set Off a 'Domino Effect' in Regional Bank Failures [Watch (HLS stream): The Fed's Latest Interest Rate Hike Could Set Off a 'Domino Effect' in Regional Bank Failures](https://cdn.jwplayer.com/manifests/DbZcwu9Z.m3u8) (2:14)  _Published 2023-05-03. The Federal Reserve reinforced its fight against high inflation Wednesday by raising its key interest rate by a quarter-point to the highest level in 16 years. But the Fed also signaled that it may now pause the streak of 10 rate hikes that have made borrowing for consumers and businesses steadily more expensive._ --- Oct 12, 2023 9:20 PM UTC --- ## More From This Series [All Videos](https://time.com/video/) [How the Fed Rate Hike Will Impact You](/video/6DaQ3zh0/) ### How the Fed Rate Hike Will Impact You [What's With The Fed and Interest Rates? Money](/video/ZjsduZFQ/) ### What's With The Fed and Interest Rates? Money [What’s All This Talk About the Fed’s Interest Rates?](/video/RIMMr3Ll/) ### What’s All This Talk About the Fed’s Interest Rates? --- ## Transcript Let me comment briefly on recent developments in the banking sector. Conditions in that sector have broadly. Improved since early March in the US banking system is sound and resilient. We will continue to monitor conditions in the sector. We're committed to learning the right lessons from this episode and will work to prevent events like these from happening again. As a first step in that process. Last week we were released by steer for supervision bars review of the federal reserve's supervision and regulation of Silicon Valley Bank today. The fomc raised its policy interest rate by a quarter percentage Point since early last year, we've raised interest rates by a total of 5 percentage points in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 per cent over time. We are also continuing to reduce our Securities Holdings. Looking ahead will take a day to dependent approach in determining the extent to which additional policy forming may be appropriate. The labor market remains very tight over the first three months of the year job gains, averaged 345000 jobs per month. The unemployment rate remained very low in March at 3.5% even. So there are some signs that supply and demand in the labor market are coming back into better balance. Inflation has moderated somewhat since the middle of last year, nonetheless, inflation, pressures continue to run high in the process of getting inflation. Back down to 2% has a long way to go. Despite elevated inflation, longer-term inflation, expectations appear to remain well anchored as reflected in a broad range of surveys of households businesses and forecasters as well as measures from financial markets. We are seeing the effects of our policy. Tightening on demand in the most interest rate sensitive sectors of the economy, particularly housing investment. It will take time, however, for the full full effects of monetary restraint to be realized especially on inflation. We will make that determination meeting my meeting based on the totality of incoming data and their applications for the outlook for economic activity and inflation. And we are prepared to do more if greater Monterey policy restraint is warranted. ```json {"@context":"https://schema.org","@type":"VideoObject","name":"The Fed's Latest Interest Rate Hike Could Set Off a 'Domino Effect' in Regional Bank Failures","description":"The Federal Reserve reinforced its fight against high inflation Wednesday by raising its key interest rate by a quarter-point to the highest level in 16 years. 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