Central banks face an excruciating trade-off

Federal Reserve chair Jerome Powell. (Image: Getty)

Fri, 24 Mar 2023

The job of central bankers is to keep banks stable and inflation low. Today they face an enormous battle on both fronts. The inflation monster is still untamed, and the financial system looks precarious.Stubbornly high inflation led the Federal Reserve to increase interest rates by a quarter of a percentage point on March 22, less than a week after the European Central Bank raised rates, too. The Fed acted days after three mid-sized American banks had collapsed and Credit Suisse, a grand old Swiss bank with more than 50...

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