Federal Reserve and Global Central Banks Act to Shore Up Dollar Access

The move was “a coordinated action to enhance the provision of liquidity,” according to the statement from the central banks.

The move comes ahead of a big week for the Fed. The U.S. central bank is set to meet and announce its latest interest rate decision on Wednesday.

Up until a few weeks ago, it seemed possible that the Fed could make a large half-point move at this meeting, as it tried to battle surprisingly stubborn inflation in an economy that had proved remarkably resilient.

But with tumult coursing across the global banking system, investors now think that a large move is unlikely: They are betting on a smaller quarter-point move, or no move at all, as officials wait to digest how the financial system is handling the latest developments. Plus, turmoil in banking can lead to less lending, which could itself help to slow down the economy.

This is a developing story. Check back for updates.

Article source: https://www.nytimes.com/2023/03/19/business/economy/federal-reserve-banks-dollar-access.html