Jerome Powell, the Federal Reserve Chair, faces the task of continuing the fight against inflation as economists anticipate one more interest rate hike to reach a level that could induce some economic discomfort or "point of pain". Despite the current rates being at their highest in 15 years (5% after a recent quarter-point increase on March 22), experts predict another quarter-point hike this spring if the recent banking crisis does not escalate into a widespread financial contagion. The aim is to stabilize inflation, which, although down from its peak last June, still stands at 6% year-over-year.

　　Economists like Kathy Bostjancic from Nationwide bank and Lydia Boussour of EY-Parthenon expect the Fed to raise rates once more during their May 2-3 meeting, taking the benchmark federal funds rate to between 5%-5.25%. However, JPMorgan Chase suggests that any further increases will depend on the stability of the banking sector, with a potential recession leading to a rate cut by the end of 2023.

　　Mark Mobius, a prominent investor, also foresees one more rate hike but believes it won't severely impact the economy. On the other hand, Bank of America projects that the Fed might have to push rates closer to 6% to effectively curb demand-driven inflation and achieve its 2% target.

　　The anticipated slowdown resulting from higher interest rates could lead to job losses and shrinking profits for small and medium-sized businesses, potentially causing unemployment rates to rise according to some forecasts—ranging from 4.5% to 5.5%. Personal consumption expenditures (PCE) inflation is expected to drop below 3% by the end of the year, per Boussour's outlook.

　　However, Diane Swonk from KPMG expressed hope that the Fed would halt further hikes given the uncertainty caused by the banking turmoil, fearing that its effects could catch the economy off guard.

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