The Federal Reserve on Wednesday approved its 10th interest rate increase in just a little over a year and dropped a tentative hint that the current tightening cycle is at an end.
In a unanimous decision widely expected by markets, the central bank's Federal Open Market Committee raised its benchmark borrowing rate by 0.25 percentage point. The rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans and credit cards.
The increase takes the fed funds rate to a target range of 5%-5.25%, the highest since August 2007.
Markets, though, are more focused on where the Fed will pause here, particularly amid concerns over economic growth and a lingering bank crisis that has rattled nerves on Wall Street.
The post-meeting statement offered only some clarity on a potential pause in rate hikes, and not by what it said but what it didn't say. The document omitted a sentence present in the previous statement saying that «the Committee anticipates that some additional policy firming may be appropriate» for the Fed to achieve its 2% inflation goal.
No doubt investors will be listening to Chairman Jerome Powell's press conference for more clarity about the central bank's intentions.
The statement also tweaked language to outline the conditions under which «additional policy firming may be appropriate.» Previously, the FOMC had framed the forward guidance around how it would determine «the extent of future increases in the target range.»
The statement reiterated that the Fed «will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial
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