Fed pauses rate hikes for first time in 15 months, but hints at future increases

The chairman discusses the U.S. central bank's decision on interest rates and its fight against inflation.on Wednesday held interest rates steady for the first time in 15 months, pausing its aggressive tightening campaign to assess how the economy is faring in the face of higher borrowing costs.

Policymakers have raised interest rates sharply over the past year, approving 10 straight rate hikes in hopes of crushing inflation and cooling the economy. In the span of just one year, interest rates surged from near-zero to a range of 5% to 5.25% – the fastest pace of tightening since the 1980s. "Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy," the Federal Open Market Committee said in its post-meeting statement. The Fed's next meeting takes place July 25-26.A FED PAUSE LIKELY WON'T HELP STRUGGLING CONSUMERS

New economic projections laid out after the meeting show that a majority of Fed officials who participated in the meeting expect rates to rise to 5.6% by the end of 2023, implying two more quarter-point increases this year. The central bank previously projected a peak rate of 5.1%, indicating that policymakers believe there is more work to be done to wrangle inflation under control. Stocks slumped following the news, with the Dow Jones Industrial Average shedding more than 250 points.

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