Is this the nudge our economy needs, or will it send the economy off a cliff? The Federal Reserve, as expected, raised the benchmark interest rate by another 0.75% in an effort to combat runaway inflation. The hope is the rate hike will slow inflation by reducing demand, but that also means higher borrowing costs and higher rates for things like mortgages, car loans and credit card debt. There are fears the Fed’s decision could send the country into a recession, but the stock market seemed happy with yesterday’s decision. Trying to reign in the economy without causing further damage is a delicate balance. Unfortunately, besides bumping borrowing rates, there is little else that can be done to bring inflation under control while helping restore consumer confidence. There are few arrows left in the quiver. President Biden gets the blame of course, but there is no way to wave a magic wand and end the war in Ukraine, which is significantly driving up food prices. The Fed has a history of guiding with a gentle hand, but they’ve been wrong before. Let’s hope the decision to raise interest rates has the intended effect, and doesn’t cause more pain in this fragile economy.