The Federal Reserve headquarters building (under renovation) in Washington. Photo: Valerie Plesch/Bloomberg via Getty Images
The Federal Reserve kept its target interest rate unchanged Wednesday for the second straight policy meeting, while acknowledging strong growth over the last few months, Axios Macro's Neil Irwin writes.
Why it matters: In keeping the benchmark federal funds rate in the 5.25% to 5.5% range, the central bank's unanimous decision left open the possibility that its two-year rate hiking campaign may have reached its end. However, it did not rule out another rate hike this year.
State of play: With inflation cooling, several top officials have said they believe the time is right to be patient and allow a series of hikes that pushed rates up by more than five percentage points since March 2022 to have their full effect.
A steep run-up in long-term interest rates in global bond markets is poised to slow activity in the weeks and months ahead. That gives some Fed officials comfort that enough has been done to quash inflation.
At a press conference Wednesday afternoon, Fed chair Jerome Powell told reporters: "I think we are seeingthe effects of all the hiking we did last year, and this year … it takes time, we know that, and you can't rush it."
Yes, but: Whether the Fed raises rates again in December could depend on whether recent readings showing strong late-summer growth continue into the fall.
