Federal Reserve raises key rate by quarter-point despite banking industry turmoil

Federal Reserve Chairman Jerome Powell speaks at a news conference Wednesday. Asked about the Fed’s missing clear signs that Silicon Valley Bank was at high risk of failing, Powell said “we do need to strengthen supervision and regulation.” (AP Photos)

WASHINGTON — The Federal Reserve extended its year-long fight against high inflation Wednesday by raising its key interest rate by a quarter-point despite concerns that higher borrowing rates could worsen the turmoil that has gripped the banking system.

At a news conference, Fed Chair Jerome Powell sought to reassure Americans that it is safe to leave money in their banks, two weeks after a rush of depositors pulled funds from Silicon Valley Bank, which collapsed in the second-biggest bank failure in U.S. history. Signature Bank fell soon afterward.