The detailed minutes from the Federal Reserve’s latest policy meeting are expected to show how close the central bank came to pausing interest rate rises following the failures of Silicon Valley Bank and Signature Bank. The March meeting’s minutes are expected to be released on Wednesday.
While the Federal Reserve ultimately decided to implement an interest rate hike of 0.25% at its policy meeting on 21 and 22 March, this came after top US officials spent the weekend formulating emergency measures aimed at halting a deposit run following the collapse of the two major U.S. banks.
Federal Reserve Chair Jerome Powell explained that while an interest rate pause was being considered, the central bank ultimately decided that different tools would be required to handle a complex situation, whereby higher interest rates remained necessary to combat inflation.
Silicon Valley Bank’s collapse was the largest banking failure since the financial crisis that spanned 2007 to 2009. Prior to this failure as well as that of Signature Bank, the Fed was considering bumping interest rates up by half a percentage point.