Fed Chair Powell noted that more than a year’s worth of interest rate hikes haven’t worked their way through the economy yet. “We’ve covered a lot of ground and the full effects of our tightening have yet to be felt,” he said.
WASHINGTON -- The Federal Reserve on Wednesday decided against what would have been an 11th consecutive interest rate increase as it measures what the impacts have been from the previous 10.
"Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy," the post-meeting statement said. The Fed next meets July 25-26. The dots moved decidedly upward, pushing the median expectation to a funds rate of 5.6% by the end of 2023. Assuming the committee moves in quarter-point increments, that would imply two more hikes over the remaining four meetings this year. During the press conference, Powell said the FOMC hadn't yet made a decision about whether another increase would be likely in July.
Members also moved up their forecasts for future years, now anticipating a fed funds rate of 4.6% in 2024 and 3.4% in 2025. That's up from respective forecasts of 4.3% and 3.1% in March, when the Summary of Economic Projections was last updated. On inflation, they raised their collective projection to 3.9% for core and lowered it slightly to 3.2% for headline. Those numbers had been 3.6% and 3.3% respectively for the personal consumption expenditures price index, the central bank's preferred inflation gauge. The outlooks for subsequent years in GDP, unemployment and inflation were little changed.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
WATCH LIVE: Federal Reserve Chair Jerome Powell holds a press conference | Fox Business VideoThe chairman discusses the U.S. central bank's decision on interest rates and its fight against inflation.
Read more »
Inflation lowest since 2021 before pivotal Federal Reserve meetingOne-year inflation expectations are down 0.3%, dropping to a 4.1% rate — the lowest annual outlook since May 2021, according to the New York Fed’s Survey of Consumer Expectations in May.
Read more »
How will US Consumer Price Index impact Federal Reserve monetary policy?The highly-anticipated Consumer Price Index (CPI) inflation data for May will be published by the US Bureau of Labor Statistics (BLS) on June 13 at 12
Read more »
Why the Federal Reserve's dual mandate may seem impossibleThe Fed has to strike a delicate balance to ensure low, steady prices while setting a course for an economy that encourages everyone to get a job who wants one.
Read more »
Federal Reserve could hint at ending rate hike cycle – JP MorganAnalysts at JP Morgan Asset Management note that the Federal Reserve is likely to pause its rate hike cycle at this week’s Federal Open Market Committ
Read more »