Photo: Jerome Powell, chairman of the U.S. Federal Reserve Jerome Powell, chairman of the U.S. Federal Reserve

Federal Reserve policymakers are increasingly grappling with a critical question: How much should they weigh the adverse impact of their interest-rate hikes on banks against the goal of containing the fastest price increases in decades?

The answer will play a major role in determining whether the Fed is steadfast in keeping rates elevated through year-end as officials expect, or whether it cuts rates, as traders are betting.

 

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