US Federal Reserve Chairman Jerome Powell has announced that the central bank has hiked interest rates for the 10 th straight time since March 2022. However, he indicated that a pause in rate hikes may be imminent under the right conditions.
Monetary policymakers intend to review interest rates again closely after assessing the damage from recent bank failures, as well as the resolution of the present political standoff over the US debt ceiling.
The decision to lift interest rates was unanimous among policymakers and placed the benchmark overnight interest rate to 5.25%. In the words of the Fed, it “anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.”
Reading between the lines, economists believe the Fed is saying it will review the facts closely in the coming weeks ahead of the next meeting in June, and it may pause further interest rate hikes if conditions are right.
What does this mean for me?
While the carefully-worded statement does not guarantee a rate increase hold, many point out that interest rates are now at roughly the same as they were on the eve of the devastating subprime financial crisis 16 years ago, and are at the level that most Fed officials projected last year would be enough to turn inflation around.