Fed Raises Interest Rates a Quarter Point; Talks of Possible Pause

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On Wednesday the Federal Reserve, in a unanimous decision, increased interest rates by a quarter of a point putting the benchmark federal funds rate at a range of 5% to 5.25%, the highest since 2007.  This is the 10th consecutive rate increase in its most aggressive tightening campaign since the 1980s to combat high inflation and slow the economy.  However, the policymakers hint of a possible pause.  Going forward, the Fed indicated that future rate increases are not a given, but future policy moves will be reliant upon “incoming information.”  Chair Jerome Powell said, “We’re no longer saying that we ‘anticipate.’  We’ll be driven by incoming data, meeting to meeting. We’ll approach that question at the June meeting.” This move comes in the wake of First Republic Bank’s failure, marking the third U.S. bank failure this year.