Fed hints at moratorium on rate hikes in June

Fed Chair Powell’s remarks on Friday followed a string of comments from Fed officials this week, conveying a decidedly mixed message about the Fed’s likely next move.

WASHINGTON — Chairman Jerome Powell suggested on Friday that the Fed will likely not raise its benchmark interest rate at its June meeting for the first time since it began raising key rates 14 months ago to combat high inflation.

In that way, Powell made some clarity about what the Fed might do next. Central Bank Officials’ Speech This Week With Cacophony It clouded the photo.

Noting that the Fed’s 10th consecutive rate hike has pushed key short-term rates up from near zero for the year, Powell said, “At this point, there’s room for a more cautious assessment of the data and the outlook for how it unfolds.” said. The previous year was about 5.1%, the highest level in 16 years.

At the Fed’s meeting in Washington, Powell said the central bank’s base rate, which affects many consumer and business loans, is now high enough to curb borrowing, spending and economic growth. said. Fed officials hope slowing growth will keep inflation under control over time.

The Fed chair has also suggested that “the risk of doing too much versus doing too little is getting balanced,” which Powell has said frequently that the risk of raising rates too little to combat inflation outweighs the risk of rate hikes. It marks a change from the beginning of the year. Raise them enough to cause a deep depression.

Powell’s remarks on Friday followed a series of comments from Fed officials this week. obviously mixed messages On the central bank’s likely next action.

Most policymakers indicated support for a moratorium at the next meeting. But some others expressed the view that the Fed will need to raise rates further to curb persistent inflation. Dallas Fed President Rory Logan said on Thursday that inflation was still too high and that the latest economic data did not yet justify a halt to rate hikes.

Inflation under the Fed’s priority measures has eased, but is still well above the central bank’s annual target of 2%. Inflation in March was 4.2% year-on-year. Still, inflation has slowed from 7% in June to 4.2% in March, according to the Fed’s preferred price index.

https://www.wtol.com/article/news/nation-world/federal-reserve-rate-hike-june-inflation/507-1ad16834-6830-4f75-9916-8bd3364f3593 Fed hints at moratorium on rate hikes in June

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