Do we have a banking crisis in the United States or don’t we?
We certainly have some of the symptoms, including two prominent banks that just failed and downward pressure this week on the share prices of other midsize banks. Yet on Wednesday, the Federal Reserve raised interest rates by .25 percentage point — which is not what you would expect a central bank to do in a crisis.
Also on Wednesday, Treasury Secretary Janet Yellen indicated that expanding deposit insurance is “not something that we’re considering” — and this is not what you would expect the country’s most experienced economic policy maker to say in a crisis.
