What's going on?

The European Central Bank (ECB) upped interest rates on Thursday, despite market turmoil.

What does this mean?

The �between a rock and a hard place� metaphors are growing stale at this stage, so here�s the truth served neat: the ECB is in a serious bind. SVB�s collapse, driven in large part by higher rates, has given the world goosebumps about global banking systems� frailty. And then there�s the issue of Credit Suisse � already beset by its own laundry list of issues � which was tottering like a man eight drinks deep until Switzerland�s central bank threw it a lifeline. It was only natural, then, that some investors called on the ECB to stop serving round after round of jumbo hikes � but in vain: the central bank dished out another 0.5-percentage-point hike, taking rates to their highest levels since late 2008. There was some evidence of caution, mind you: the ECB broke with tradition and kept mum about its next steps.

Why should I care?

For markets: A problem shared.
The world�s going to have to wait and see how the flailing banking system affects the ECB�s ability to tackle rising prices. After all, inflation�s still closer to double digits than it is to the central bank�s 2% target. But hey, at least misery has company: the US and UK have to answer their own �to hike or not to hike?� dilemmas next week � and there are no easy options on the table. The ECB�s backing itself, though, reassuring investors that it�ll be able to support the bloc�s financial system if it needs to.

The bigger picture: Dimming hopes.
Whichever poison the Federal Reserve picks, the banking debacle has already darkened the US economic outlook. On Thursday Goldman Sachs upped the odds of a recession hitting in the next year to 35%. Still, compared to the average economist, who says it�s more like 60%, Goldman seems like an optimist.