The Federal Reserve paused its interest-rate hike campaign on Wednesday for the third time this year despite signs that inflation remains unusually high.
The Federal Reserve on Wednesday held interest rates steady for the third time this year even as central bankers confront a surprisingly resilient economy and still too-high inflation. The widely expected decision left interest rates unchanged at a range of 5.25% to 5.5%, the highest level in 22 years. But policymakers also left the door open to an additional increase before the end of the year amid concerns that inflation "remains elevated.
Hiking interest rates tends to create higher rates on consumer and business loans, which then slows the economy by forcing employers to cut back on spending. Higher rates have helped push the average rate on 30-year mortgages above 8% for the first time in decades. Borrowing costs for everything from home equity lines of credit, auto loans and credit cards have also spiked. Yet the rapid rise in rates has not stopped consumers from spending or businesses from hiring.
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