at its Wednesday meeting, putting a pause on the central bank's 10 consecutive increases in 15 months. This leaves the target benchmark borrowing rate between 5% and 5.25%.
The Fed's decision also comes with the projection of another two 25-basis-point rate hikes before the end of 2023, which would bring the benchmark rate to between 5.5% and 5.75%. Current markets betting on the central bank's future rate plans suggest there is about a 60% chance the Fed will hike rates by 25 basis points at its July meeting, The Fed's decision is another step in its attempt to strike a balance between slowing the economy to a point where inflation is back to its target while going at a pace that won't disturb growth, which could lead to widespread job loss.
"The ongoing strength of the labor market, coupled with the stickiness of core inflation, means that the FOMC meeting will likely represent a 'skip' rather than a 'pause,'" said Shah."Without a meaningful downside surprise in both jobs and inflation, a final interest-rate hike remains in the cards for July."
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