Payroll growth remains solid, as do wage gains, which put some upward pressure on prices. Rate increases larger than a quarter point are not likely since the Fed is inching closer to its inflation goal and officials thought it made “obvious sense to moderate our rate hikes as we got closer to our destination,” Powell said.įuture policy moves depend on what economic indicators show in the coming weeks and months, including the resilient job market. Most officials estimate the federal funds rate will top out at a range of 5.63-5.87% in 2023, suggesting there might be as many as two more quarter-point hikes this year. “Looking ahead, nearly all Committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down 2% over time,” Fed Chair Jerome Powell said in his post-meeting news conference. The Fed’s post-meeting statement confirmed that officials deem the pause a prudent move, but most officials think additional hikes are necessary this year, according to the Fed’s latest Summary of Economic Projections. Since March 2022, Fed officials have raised the central bank’s benchmark interest rate 10 times in a row in an attempt to cool the US economy and battle inflation that is still double the Fed’s target. The vote to skip a rate increase this meeting was unanimous. The Federal Reserve said Wednesday it would pause its historic rate-hiking campaign as it waits for the effects to trickle further through the economy, but signaled that additional rate hikes are likely this year.
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