The Federal Reserve system was stung in late 2021 when it declared signs of emerging inflation to be "transitory" and delayed taking strong action to tamp down price increases.

The central bank has been running from its critics ever since. Under its chairman, Jerome H. Powell, it has instituted the most aggressive anti-inflation interest rate increases in more than 40 years as if to make up for its initially laggard response to what proved to be a nearly yearlong run-up in prices.

In the process, however, the Fed has inflicted damage on bank balance sheets that could have more-lasting negative effects on economic growth than would be felt from even a sustained period of high inflation.

The harvest is a banking crisis triggered by the failure on March 10 of Silicon Valley Bank, or SVB, and the subsequent run on several other banks in the U.S. and overseas thought to need bailouts.

At this moment, as Fed officials prepare for a two-day meeting at which they will decide whether or by how much to raise rates, expectations in the Fed-watching community are that the bank will slow the pace of its recent increases by announcing a hike of only a quarter of a percentage point on Wednesday. That would bring its total increases to 4.75 percentage points in the space of just one year.

Some economists and policy experts are counseling that the bank shouldn't raise rates at all this week, however, lest it tip the economy into recession.

There are several reasons: The Fed's interest rate increases have already brought about signs of a slowing economy, businesses and families that were flush with cash last year thanks to government assistance have spent down their financial cushions, and the banking crisis is almost certain to prompt banks to tighten their lending standards, adding another head wind to economic growth.

"The interest rate shock is still there, ... and we've got the banking crisis on top, and we've got a smaller stock of savings," Ian C. Shepherdson, chief economist of Pantheon Macroeconomics, said during a webcast Monday. "I'm just one more sleepless night away from taking my core macro forecast from no growth to outright recession, and if that is the most likely outcome, why on earth would the Fed keep raising rates?" Shepherdson said that if he could advise Fed officials directly, he'd tell them: "Please don't."

Former FDIC Chair Sheila Bair, who was in place during the 2008 banking crisis, added her voice to the chorus in an interview Sunday with CNN. "The Fed needs to hit pause and assess the full impact of its actions so far before raising short rates further," she said. "If they paused, it would have a settling effect on the markets."

Economists' concerns about the scale and speed of the Fed's rate increases have been building for months. Former Fed economist Claudia Sahm has long warned that "the Fed's large and rapid rate hikes during the past year were going to break something in financial markets," as she wrote on her blog last week. "The meltdown at SVB and the possible contagion effects fit the bill."

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