The Federal Reserve’s hotly anticipated March 22 interest rate decision is just eight days away, and the drama that swept the banking and financial sector over the weekend is drastically shaking up expectations for what the central bank will deliver.

The Fed had been raising interest rates rapidly to try to contain the most painful burst of inflation since the 1980s, lifting rates to above 4.5% from near zero a year ago. Concern about rapid inflation prompted the Fed to make four consecutive three-quarter point increases last year before slowing to a half point in December and a quarter point in February.

Last week investors had seen a substantial chance that the Fed would make a half point increase at its meeting next week. That step up was seen as an option because job growth and consumer spending have proven surprisingly resilient to higher rates – prompting Jerome Powell, the Fed chair, to signal just last week that the Fed would consider a bigger move.

But investors and economists no longer see that as a likely possibility.

Three notable banks have failed in the past week alone as Fed interest rate increases ricochet through the technology sector and cryptocurrency markets and upend even usually staid bank business models.

Regulators on Sunday evening unveiled a sweeping intervention to try to prevent panic from coursing across the broader financial system, with the Treasury, Federal Deposit Insurance Corp. and the Fed saying that depositors at the failed banks would be paid back in full. The Fed announced a dramatic emergency lending program that will help to funnel cash to banks that are facing steep losses on their holdings because of the change in interest rates.

The tumult – and the risks to higher interest rates that it exposed – is likely to make the central bank more cautious as it pushes forward.

Investors have abruptly downgraded how many interest rate moves they expect this year. After Powell’s speech last week opened the door to a large rate change at the next meeting, investors sharply marked up their 2023 forecasts, penciling in a tiny chance that rates would rise above 6% this year. But after the wild weekend in finance, they see just a small move this month and expect the Fed to cut rates to just above 4.25% by the end of the year.

Economists at J.P. Morgan said that the situation bolsters the case for a smaller quarter-point move this month. Goldman Sachs economists no longer expect a rate move at all. While Goldman analysts still think the Fed will raise rates to above 5.25%, they wrote on Sunday evening that they “see considerable uncertainty about the path.”

This moment poses a major challenge for the Fed: It is in charge of fostering stable inflation, which is why it has been raising interest rates to slow spending and business expansions, hoping to rein in growth and cool price increases. But it is also tasked with maintaining financial system stability.

Because higher interest rates can unveil weaknesses in the financial system – as the blowup of Silicon Valley Bank on Friday and the towering risks facing the rest of the banking sector illustrated – those goals can come into conflict.

Subadra Rajappa, head of U.S. rates strategy at Societe Generale, said on Sunday afternoon that she thought the unfolding banking situation would be a caution against moving rates quickly and drastically – and she said instability in the banking sector would make the central bank’s job “trickier,” forcing it to balance the two jobs.

“On the one hand, they are going to have to raise rates: That’s the only tool they have at their disposal,” she said. On the other, “it’s going to expose the frailty of the system.”

Rajappa likened it to the old saying about the beach at low tide: “You’re going to see, when the tide runs out, who has been swimming naked.”

This article originally appeared in The New York Times.