Fed: US banking system solid and resilient, but credit crunch could weigh on the economy and inflation

“The US banking system is solid and resilient”. So reads the release in which the Fomc, the monetary policy arm of the Federal Reserve, announced that it had raised fed funds rates to a new range of between 5% and 5.25%, the record since July 2006 .

“Stricter credit conditions for households and businesses – continues the press release from the US central bank led by Jerome Powell – will probably weigh on economic activity, hiring and inflation”.

Again, the Fed stressed that “the Commission (of monetary policy, or the FOMC) remains very attentive to inflation risks”.