Fed Halts Rate Hikes: Assessing the Future Amidst Inflation Concerns | June 14, 2023

The Federal Reserve, breaking from a series of 10 rate hikes over 14 months, has held its policy rate steady at 5.0%-5.25%, providing a window to assess the implications of the 5 percentage point hikes already executed. However, this doesn't necessarily signal an end to potential rate increases; the Fed will continue to monitor incoming data for signs of declining inflation in the following months.

In an effort to guide inflation back to the 2% mark over time, the central bank will consider various factors, including the cumulative effect of monetary tightening, the time lag of monetary policy's impact on economic activity and inflation, and recent financial developments. While May's Core Consumer Price Index rose 5.3% year-over-year, surpassing the central bank's target, the Fed primarily relies on the core PCE Index to measure inflation, which will be reported on June 30. Looking forward, the Federal Open Market Committee's next meeting is scheduled for July 25-26. #FOMC #FED #MarketUpdate #RateHike