> Not Finance person, but Fed not raising interest rate would evoke suspicion about how bad is it?
OTOH, to the extent the banking turmoil and recession risk is a problem, the hike directly makes it worse. That may not be a better choice than something that merely signals that you think it is worse.
Makes it worse in the short-term, but if you continue to steer boat off course the more drastic the course corrections will have to be later on.
If we are timid now, it will only require larger course corrections later if we want to get inflation under control. The longer we wait, the more inflation gets baked into expectations and pricing.
OTOH, to the extent the banking turmoil and recession risk is a problem, the hike directly makes it worse. That may not be a better choice than something that merely signals that you think it is worse.