A banking crisis that rekindled recession fears and could deal a blow to future lending has called into question the Federal Reserve’s current leadership, and whether it is up to the task of bringing down inflation while also maintaining financial stability.
Things were starting to look up for Fed Chair Jerome Powell only a few months ago. After hitting 40-year highs last summer, inflation lost considerable steam towards the end of 2022. The economy was still running smoothly too, with the job market historically strong and consumer spending high despite inflated prices, a promising sign that the Fed was succeeding in its dual mandate of maximum employment and stable prices.
