The Federal Reserve on Wednesday raised a key interest rate again, but it also signaled it was ready to pause and said further monetary tightening would depend on how inflation and the economy respond to sharply higher borrowing costs.
The Fed also reworked the language in its post-meeting statement, scrapping a line saying that “some” additional hikes “may” be needed. There were no dissents. That suggests even those voting members who have been more concerned about inflation, like Fed Gov. Christopher Waller, can work with it for now.
Yet the latest rate hike could very well be the last of the current cycle. Powell himself suggested interest rates could be restrictive enough to do the job in getting inflation back down to pre-pandemic levels. Today’s move was the tenth straight meeting with an interest rate rise as the Fed battles high inflation sparked by government spending and supply disruptions during the pandemic.
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