Since several banks, particularly many small co-operative banks, had exposure to this bank, its failure had the potential to precipitate a crisis in the banking industry. The Government and the Reserve Bank put in place resolution of this bank through a restructuring programme.
Stronger growth or a more rapid increase in inflation than we currently anticipate would suggest that the neutral federal funds rate is rising more quickly than expected, making it appropriate to raise the federal funds rate more quickly as well; conversely, if the economy disappoints, the federal funds rate would likely rise more slowly.