U.S. Federal Reserve caught between inflation and bank crisis

All eyes in the financial and economic world will be laser-focused Wednesday on the Federal Reserve as Chair Jerome Powell tries to balance his fight against inflation against a sudden banking crisis.

Powell and his colleagues began their meeting Tuesday with the outcome unusually unclear. While most economists expect a quarter-point interest-rate hike, some say policymakers should pause to shore up financial stability.

“This tension is leading to existential angst,” said Derek Tang, an economist at LH Meyer/Monetary Policy Analytics in Washington. “Have they gone too far, or not far enough? Both could be true at the same time.”