Federal Reserve considering another interest rate hike

WASHINGTON, D.C. (NBC) – The Federal Reserve is considering another interest rate hike Wednesday to keep driving down inflation.

The consequential decision comes amid turmoil in the banking industry that analysts say is partially driven by those hikes.

Also, new numbers from the National Association of Realtors show home sales spiked for the first time in 12 months, as prices fell year-over-year for the first time in more than a decade.

The Federal Reserve’s interest rate decision highlights the competing interests in trying to help Americans struggling in an uncertain economy.

An economic tightrope act has the Federal Reserve balancing its core mission of lowering inflation with the impact of aggressive interest rate hikes on a banking industry in turmoil.

CNBC Senior Whitehouse Correspondent Kayla Tausche said, “There have been questions as to whether they might pause, take a beat and pick this up at the next meeting, but the markets still expect a smaller rate hike.”

The Fed’s interest rate decision follows a months-long campaign of rate hikes that has lowered the value of investments.

That puts pressure on smaller banks, contributing to two recent collapses and industry moves to increase stability.

Treasury Secretary Janet Yellen said the federal government could act further to guarantee bank deposits are safe.

Persistent interest rate hikes have also had a marked effect on the housing market.

The National Association of Realtors released new data Tuesday showing home sales spiked in February for the first time in twelve months as prices dropped year-over-year for the first time in nearly 11 years.

Jessica Lautz with the National Association of Realtors said, “For a homebuyer today in comparison to a year ago, it’s a better market for them. They have a higher interest rate, but they may have more of a chance of having that offer accepted.”

The mixed outlook comes against the backdrop of President Biden’s expected reelection run, with Republicans blaming him for economic uncertainty and the latest NBC News poll showing just

36% approval of his handling of the economy.

The White House is seeking to calm nerves and show a steady hand.

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