The value of U.S. retail purchases, unadjusted for inflation, was little changed from a month earlier, and gains in prior months were lower than previously thought.

In contrast to recently released economic data, Fed districts report seeing weakness in some areas of consumer spending and smaller profit margins for businesses.

China, Thailand, Hong Kong, and the UAE are collaborating to develop mBridge, a multi-CBDC bridge, that promises cross-border settlement in seconds rather than days.

"Banks are likely to become somewhat more cautious. That does tend to lead to somewhat greater restriction in credit that could be a substitute for further interest-rate hikes that the Fed needs to make."

While the Fed promises to "fully protect all depositors," some question the moral hazard of protecting banks from the effects of poor decision-making.

With inflation heading downward, the debate is now shifting to what happens after this fight is over— and the risks of getting it wrong are high, both economically and politically.

Nellie Liang, the U.S. Treasury Department's undersecretary for domestic finance, says that the need for a digital dollar doesn't currently exist and that the U.S. might adopt a CBDC several years from now, if a lot of other countries do so first.

Inflation seems to be slowing, but the Treasury chief emphasized that some sectors continue to fuel steep price increases.