Federal Reserve Expects More Rate Hikes; Powell Believes “More Restrictions Coming”

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According to the minutes from the June Federal Open Market Committee (FOMC) policy meeting, Federal Reserve officials agree that more rate hikes are ahead but at a slower pace. They found it acceptable to leave the target rate unchanged at 5 to 5.25 percent and that “maintaining a restrictive stance for monetary policy would be appropriate to achieve the Committee’s objectives.”  Fed economists expect two more rate hikes in 2023 to lift the median policy rate to 5.61 percent, however, not everyone thinks the Fed should keep increasing the rates.  Fed Chair Jerome Powell said that he would not take rate hikes at “consecutive meetings off the table.”  He said, “We’ve now moved up to where we actually are in restrictive territory, but we haven’t been there very long. We believe there’s more restriction coming.”