WASHINGTON: The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets spurred by the collapse of two US banks.
The move set the US central bank’s benchmark overnight interest rate in the 4.75%-5.00% range, with updated projections showing 10 of 18 Fed policymakers still expect rates to rise another quarter of a percentage point by the end of this year, the same endpoint seen in the December projections.
But in a key shift driven by the sudden failures this month of Silicon Valley Bank (SVB) and Signature Bank, the Fed’s latest policy statement no longer says that “ongoing increases” in rates will likely be appropriate. That language had been in every policy statement since the March 16, 2022 decision to start the rate hiking cycle.
Instead, the policy-setting Federal Open Market Committee said only that “some additional policy firming may be appropriate,” leaving open the chance that one more quarter-of-a-percentage-point rate increase, perhaps at the Fed’s next meeting, would represent at least an initial stopping point for the rate hikes.
Though the policy statement said the US banking system is “sound and resilient,” it also noted that recent stress in the banking sector is “likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation.”
There were no dissents on the policy decision.
The document made no presumption that the battle with inflation has been won. The new statement dropped language saying that inflation “has eased” and replaced it with the declaration that inflation “remains elevated.”
Job gains are “robust,” according to the Fed.
Officials projected the unemployment rate to end the year at 4.5%, slightly below the 4.6% seen as of December, while the outlook for economic growth fell slightly to 0.4% from 0.5% in the previous projections. Inflation is now seen ending the year at 3.3%, compared to 3.1% in the last projections.
The outcome of the two-day meeting this week marks an abrupt repositioning of the central bank’s strategy from just two weeks ago, when Fed Chair Jerome Powell testified in Congress that hotter-than-expected inflation would likely force the central bank to raise interest rates higher and possibly faster than expected.
The March 10 collapse of California-based SVB and the subsequent collapse of New York-based Signature Bank highlighted broader concerns about the health of the banking sector, and raised the possibility that further Fed rate increases might tip the economy towards a financial crisis.
Powell is scheduled to hold a news conference at 2:30 p.m. EDT (1830 GMT) to elaborate on the policy decision and the Fed’s views on recent events.

MUMBAI: Beleaguered businessman Vijay Mallya bought properties worth Rs 330 crore in England and France during 2015-16 even as his Kingfisher Airlines was facing a cash crunch at that time and banks had not recovered the loans defaulted by the liquor baron, the CBI has claimed in its supplementary chargesheet filed in a court here.
Mallya is an accused in the alleged over Rs 900 crore IDBI Bank-Kingfisher Airlines loan fraud case being probed by the Central Bureau of Investigation (CBI). The central agency recently filed a supplementary chargesheet before a special CBI court here. Along with all the 11 accused named in the earlier chargesheets, the probe agency has added the name of Buddhadev Dasgupta, former general manager of IDBI Bank in its latest supplementary chargesheet.
The probe agency alleged that by abusing his official position, Dasgupta conspired with the officers of IDBI Bank and Vijay Mallya in the matter of sanction and disbursement of the short-term loan (STL) of Rs 150 crore in October 2009. The said loan of Rs 150 crore as envisaged originally by Dasgupta (by proposal circulated among credit committee members) was to be adjusted/repaid from the aggregate loan of Rs 750 crore originally sought by the airlines.

However, after circulation, there was change in the proposal to show as if the credit committee had treated this as a separate loan, which may (or may not) be adjusted/recovered from the aggregate loan. The chargesheet said the exposure of IDBI Bank was to be restricted to the aggregate amount of Rs 750 crore, but it became Rs 900 crore in December 2009 because the STL of Rs 150 crore was kept as a separate loan, largely at the behest of Dasgupta.
During the course of investigation, letters rogatory (LRs) had been sent to the United Kingdom, Mauritius, the USA and Switzerland as per the permission of the CBI court. Courts of one country seek the assistance of the courts in another for the administration of justice there through letters rogatory. The chargesheet mentioned the evidence collected during foreign investigation from these countries.
“The properties in the UK (Ladywalk in 2015-16 for GBP 12-13 million or Rs 80 crore) and France (‘Le Grand Jardin’ in 2008 for Euro 35 million or Rs 250 crore approximately) were acquired by Mallya even as Kingfisher Airlines was facing severe a cash crunch (2008) and the lenders were yet to recover the loans defaulted upon by Mallya and the Airlines (2015-16),” it said.
The chargesheet claimed that Mallya had adequate funds at his disposal between 2008 and 2016-17, but none of it was brought to support the airlines as equity infusion or to honour his obligations as a personal guarantor for the loans availed by KAL from IDBI and other banks in India.
The chargesheet, citing the evidence collected through LRs, said that sizable amounts were transferred to Force India Formula 1 Team between 2008 and 2012, it said. The chargesheet further said that significant amounts were diverted from 2007 to 2012-13 and used to make payments towards acquisition and repayment of loan for the corporate jet used personally by Mallya.
Besides the CBI, the Enforcement Directorate (ED) is also probing a money laundering case against Mallya. On January 5, 2019, a special court in Mumbai had declared Mallya a ‘fugitive’.
Under the provisions of the Fugitive Economic Offenders Act, once a person is declared a fugitive economic offender, the prosecuting agency has the powers to confiscate his property.

NEW DELHI: Making healthcare affordable, accessible and available to all can help one attain the Sustainable Development Goal of ensuring a healthy life and promoting wellbeing for all age groups, Bhubaneswar Kalita, chairperson of Parliamentary Standing Committee on Health and Family Welfare said on Wednesday.
“Our main challenge is the lack of a diversified and qualified workforce and we must work towards improving the status quo as the workforce is the soul of our healthcare system,” Kalita said at ASSOCHAM‘s ‘Illness To Wellness’ Summit.
There should also be a focus on improving women’s health for larger interest of families, communities and nation in order to reduce the burden on public healthcare infrastructure and spending, he said.
The ASSOCHAM Foundation for CSR, under the aegis of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), one of the apex trade associations of India, today kickstarted the first edition of the Awareness Summit on ‘Illness to Wellness’ here.
The key objective of the two-day summit is to initiate a dialogue on promoting and building a ‘New India–Healthy India’.
The first session, on day one, of the summit saw a panel of distinguished experts discuss the possible ways to strengthen the healthcare workforce with the objective to ease the healthcare burden of the country.
Sharing his thoughts during the inaugural session, Anil Rajput, chairperson, ASSOCHAM National CSR Council, said India is at the cusp of an exciting and transformative time as it aims to reach USD 26 trillion in economic prosperity in its ‘Amrit Kaal’.
“I strongly believe that when the workforce is healthy and capable, our nation can achieve its full potential across all domains. The Government of India has also accorded topmost priority to it, making it a fundamental pillar for a ‘Swastha and Samruddha Rashtra’. It is my firm conviction that India’s determined strides in the economic sphere can gain even greater momentum if the health of its citizenry remains sound,” he said.