Michael Hiltzik: The Fed's errors have brought the economy to the brink of recession. Raising rates again might send it over

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,