Fed Pauses Interest Rates After 10 Consecutive Hikes; Committee Likely to Raise Rates ‘Somewhat Further’ This Year
In accordance with market predictions, the U.S. Federal Reserve decided to halt its rate hike this month after ten consecutive hikes since last year. The members of the Federal Open Market Committee (FOMC) asserted that the U.S. banking system is still “sound and resilient,” and the committee continues to closely monitor inflation risks.
Federal Reserve Halts Rate Hike Amid Market Predictions; Inflation Concerns Remain
The U.S. central bank opted to maintain the federal funds rate unchanged this month after ten consecutive rate hikes since March 2022. According to the FOMC statement, indicators indicate a modest increase in economic activity, while emphasizing that “job gains have been robust in recent months, and the unemployment rate has remained low.” The Fed’s announcement specified that the FOMC still aims to bring the inflation rate down to the 2% range.
This week, the U.S. Bureau of Labor Statistics issued the consumer price index (CPI) report, indicating that inflation eased in May and fell to an annual rate of 4%. To attain a 2% inflation rate and achieve full employment, the FOMC “decided to maintain the target range for the federal funds rate at 5 to 5-1/4 percent.” Furthermore, the committee stated its readiness to “adjust the stance of monetary policy as appropriate if risks emerge.”
In the wake of the decision, all four benchmark stock indexes on Wall Street experienced declines, and the crypto market also suffered a modest drop upon receiving the news. Conversely, the spot prices of gold and silver saw an increase following the Fed’s latest update. Analysts and economists remain uncertain about the Fed’s future actions and will await Jerome Powell’s remarks subsequent to the meeting.
“What they’re doing, exactly, is less clear,” Dean Maki, the chief economist at hedge fund Point72 Asset Management told the Wall Street Journal on Wednesday. “It is defensible to slow down the pace of hiking at this point. But it does make communication more difficult.” Maki added that the bank failures in March are leading the Fed to hike less aggressively than they would have otherwise.”
However, after the FOMC meeting, Powell addressed the press and noted that “nearly all committee participants expected it will be appropriate to raise interest rates somewhat further by the end of the year.”
What are your thoughts on the Federal Reserve’s decision to pause the rate hike? Share your thoughts and opinions about this subject in the comments section below.
Source: Bitcoin.com
The post Fed Pauses Interest Rates After 10 Consecutive Hikes; Committee Likely to Raise Rates ‘Somewhat Further’ This Year appeared first on Crypto Breaking News.
Text source: Crypto Breaking News
