Federal Reserve's policy meeting: Here's what to expect

This week's policy meeting of the Federal Reserve comes amid a challenging scenario in the U.S that stemmed from the collapse of Silicon Valley Bank and the following repurcussions.

In what is a crucial policy meeting, the Fed will weigh whether to continue raising interest rates to clamp down on inflation or to pause the rate hikes amid the market turmoil.

As per Bloomberg, before the collapse of Silicon Valley Bank and the resulting fallout, Fed policy makers were poised to raise rates by as much as 50 basis points after a string of data suggested the economy was much stronger than officials thought at the beginning of the year.

While there are those who believe that the Fed must pause on rate hikes given the macro envioronment, other are of the view that Fed may go ahead with a 25 basis points rate hike during this week's policy meet.

The Fed's decision follows a 50-basis-point rate hike from the European Central Bank on Thursday. President Christine Lagarde said the ECB remains committed to fighting inflation, while monitoring bank tensions closely.

Previously, the Fed announced four consecutive rate hikes, ranging from 25 bps to 75 bps.

The Federal Reserve officials are also expected to discuss the failure of the two U.S banks as well as the Credit Suisse crisis.