The daily business briefing: May 4, 2023

The Fed raises interest rates again, PacWest considers sale and other options as regional bank pain spreads, and more

Jerome Powell at a lectern
(Image credit: Anna Moneymaker/Getty Images)

1. Fed hikes interest rates for 10th time but indicates pause

The Federal Reserve on Wednesday raised interest rates a quarter of a percentage point and suggested it might pause its aggressive campaign to fight inflation to assess whether the damage from recent bank failures will get worse. The indication this 10th-straight hike might be the last marked a significant shift in the central bank's effort to bring down inflation and steer the recovery from the COVID-19 crisis. Fed Chair Jerome Powell said another issue currently creating anxiety for markets, the fear that Congress will fail to raise the debt ceiling and allow a catastrophic default on federal debt, shouldn't even be considered a possibility. "We shouldn't even be talking about a world in which the U.S. doesn't pay its bills," Powell told reporters.

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Harold Maass, The Week US

Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.