Federal Reserve expects rate hike this month

Federal Reserve chairman Jerome Powell said he supports a traditional quarter-point interest rate increase rather than the larger one that some policymakers have proposed. Most other Fed officials have in recent weeks supported a similarly modest rise, while a few have said they back a half-point hike. Higher rates typically lead to higher borrowing costs for consumers and businesses, including for homes, auto loans, and credit cards. Powell explained a rate increase may help to curb inflation by stabilizing demand.

Do sanctions on Russia affect the U.S. economy? Heavy-hitting sanctions on Russian elites and banks have plunged the value of the ruble and shuttered Moscow’s trading. Powell said it is too soon to tell how the West’s squeeze on the Russian economy will affect American markets. The S&P 500 index fell sharply Tuesday but rallied and recouped Wednesday. The price of U.S. oil jumped to over $110 per barrel this week, the highest level in more than a decade. President Joe Biden said in his State of the Union address Tuesday night that his administration is working to counteract higher gas prices.

Dig deeper: Read Carolina Lumetta’s report in The Sift about some of the latest sanctions on Russia.