(The Center Square) – The U.S. Federal Reserve Board Wednesday announced another increase to the federal funds rate, inching the target range up to 5% to 5.25%, an increase of a quarter of a point.

Wednesday’s announcement is the tenth rate hike since March 2022.

“We are prepared to do more if greater monetary policy restraint is warranted,” Federal Reserve Chair Jerome Powell said in a news conference after the announcement.

The Fed bases its decision largely on the health of the economy and whether the agency thinks it can withstand the economic pain of another rate hike.

The Feds’ key interest rate was 1% to 1.25% just before the COVID-19 pandemic. In the middle of March 2020, the rate dropped to 0 to 0.25%. The federal government soon kicked off a several trillion dollar spending spree over the next two years in response to hardships during the pandemic, which were fueled in large part by aggressive lockdown policies.

Since that pandemic-era spending, inflation has soared, in particular affecting gas and food prices.

The banking sector has struggled in recent months with several bank collapses fueled in part by rate hikes. Experts fear another rate hike could worsen that situation, which is far from stabilized. The rate hike could increase fears that regional banks will go insolvent because they are less able to weather storms than bigger banks, potentially leading to a run on the depositors hoping to get their money out just in case.

The Federal Reserve board waved off those risks in its announcement.

“The U.S. banking system is sound and resilient,” the group said. “Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.”

Democrats raised concerns that the rate hikes amid a shaky banking environment could force an economic downturn that hurts Democrats in the next election.

Some were more optimistic.

“The remaining question is how much the regional bank crisis and credit crunch will slow the economy,” said Gina Bolvin, president of Bolvin Wealth Management Group. “Investors should remain cautiously optimistic. Evidently Powell thinks the economy is strong enough to continue to tighten.”

D.C. Bureau Reporter

Casey Harper is a Senior Reporter for the Washington, D.C. Bureau. He previously worked for The Daily Caller, The Hill, and Sinclair Broadcast Group. A graduate of Hillsdale College, Casey’s work has also appeared in Fox News, Fox Business, and USA Today.