In a much-anticipated move, the Federal Reserve said Wednesday it would raise the federal funds rate by 25 basis points to a range of 5% to 5.25%. The rate is now the highest since August 2007.
Wednesday’s statement from the Fed’s Federal Open Market Committee hinted that we could see a pause in future rate hikes. While the March FOMC meeting statement indicated that future increases could be appropriate, the latest statement said the committee would “closely monitor incoming information and assess the implications for monetary policy.”
In determining “the extent to which additional policy tightening may be adequate to return inflation to 2% over time,” the FOMC will consider “the cumulative tightening of monetary policy, the delays in monetary policy affects economic activity and inflation, and the economy and inflation.” financial evolution”, according to the statement.
CNBC reported that markets anticipate that “slower growth and the possibility of recession will force the Fed to cut rates later this year.” Currently, however, the labor market remains resilient, and while manufacturing activity has contracted over the past six months, the services sector is pointing toward expansion, CNBC reported.
