The Federal Reserve raised its key interest rate Wednesday for the 11th time in 17 months as part of its ongoing drive to curb inflation. But it provided little guidance about when — or whether — it might hike rates again.
Federal Reserve Chair Jerome Powell speaks during a news conference at the William McChesney Martin Jr. Federal Reserve Board Building following a Federal Open Market Committee meeting on Wednesday, July 26, 2023, in Washington.
“It was about as clear as mud, and I think that was the point,” said Diane Swonk, chief economist at accounting giant KPMG. “They don’t want to declare victory too soon. They know inflation moves in fits and starts.” Though inflation has reached its slowest pace in two years, Wednesday’s hike reflects the concern of Fed officials that the economy is still growing too fast for inflation to fall back to their 2% target. With consumer confidence hitting its highest level in two years, Americans keep spending — crowding airplanes, traveling overseas and flocking to concerts and movie theaters. Most crucially, businesses keep hiring.
“We want core inflation to be coming down,” Powell said. “Core inflation is still pretty elevated. And so we think we need to stay on task.”
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