The Fed Pauses Interest Rate Hikes

June 14, 2023
coins with plant sprouting up from them

Today we decided to leave our policy interest rate unchanged.

Federal Reserve Chair Jerome Powell on Wednesday. The Federal Reserve – also referred to as the nation’s central bank – has held its key interest rate flat.

The Big Picture: The Federal Reserve paused the "most aggressive push to quash inflation since the 1980s" on Wednesday after announcing it will take a break in raising interest rates (CBS News). For the first time in more than a year, borrowing costs for things like car loans and credit cards will not rise.

Why It Matters: The central bank has raised interest rates a total of 10 times since March 2022 in order to combat inflation. Inflation has decreased from 9% to 4% from June 2022 to May 2023.

Important to Note: The Fed may increase rates in future months if needed. The inflation rate goal remains at 2% and the Fed's Open Market Committee said it will raise rates "if risks emerge that could impede the attainment of the Committee’s goal."

Federal Reserve holds key rate at 5% as it evaluates state of the economy following lower inflation reading

by Jenna Lee,