the european central bank raised its benchmark interest rate by 50 basis points on thursday will the us federal reserve follow suit the answer is yes albeit a smallersized move economists said thursday the ecb rate hike is a model that the fed can use said vincent reinhart chief economist at dreyfus and mellon the ecb move was an action driven by their macroeconomic responsibility and it was couched in concern for how things might unfold they said carefully monitoring a lot i think thats what the fed will do reinhart added the fed meeting will start later tuesday and will release its decision at 2 pm eastern wednesday fed chair jerome powell will follow with a press conference a half hour later fears of financialsector contagion from the collapse of silicon valley bank have eased in the past 24 hours late thursday a group of leading banks agreed to deposit 30 billion in first republic the san franciscobased regional bank that has been under the microscope since last weeks collapse of silicon valley bank treasury secretary janet yellen and powell welcomed the move with yellen stressing the us banking system was sound earlier embattled swiss banking giant credit suisse said it would get financial help from the swiss central bank powell and his colleagues only need to raise rates by a quarter percentage point because they started ahead of their ecb colleagues in frankfurt economists explained thursday a larger halfpercentage move was seen as too large given the uncertain environment pausing would send a negative signal that the fed was worried about the financial sector reinhart said neil dutta head of macroeconomic research at renaissance macro research agreed that the ecb showed the fed that the coast was clear for continued hikes if the ecb can get away with 50 i think the fed can go 25 dutta said before the collapse of silicon valley bank the fed was said to be leaning toward a 50basispoint move powell had left the door wide open for a larger move after two days of testimony to congress earlier this month the most recent economic data would justify that larger move dutta said upwardly revised gdp core retail sales jobless claims and housing are all pretty strong we went into this shock pretty strong dutta said instead of signaling that ongoing rate hikes would occur reinhart said the fed would signal that further rate hikes would likely be appropriate but that the central bank was monitoring financial conditions closely gradualism works they can say they are doing more 25s but no one will believe powell reinhart said powell wont feel the need to convince markets about more hikes because if markets snapped back to where the fed is that would be a significant tightening he said not everyone agrees that a hike next week is in the offing robert brusca president of fao economics said that the fed should stop the tightening process at least for now financial contagion like the smell of perfume has a tendency to linger he said  and reappear suddenly former fed gov daniel tarullo said the shock to the banking system this week will already produce a significant tightening of financial conditions in some sense what has happened is the equivalent of a federal funds increase tarullo said in an interview on cnbc that could be used to justify a pause at the march meeting he said trading has been volatile all week but at the moment traders in the fed funds futures market see more than an 80 chance the fed will raise its benchmark rate by a quarter of a percentage point to a range of 4755 next week traders see only one more quarterpoint hike after that which would put the feds endpoint in a range of 5525 rate cuts will follow swiftly according to traders but they now expect fewer cuts by years end than they did earlier this week the fed will release its estimate of path of interest rates next week it is likely to be more hawkish than what the market now expects reinhart of dreyfus and mellon said but powell may be able to distance himself from this view stocks were set to open higher on tuesday and the yield on the 10year treasury note rose to 357 this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal