Fed Slows Rate Hikes, Signals Further Increases Are Coming
The Federal Reserve slowed its drive to rein in inflation and said further interest-rate hikes are in store as officials debate when to end their most aggressive tightening of credit in four decades.
Chair Jerome Powell and fellow policymakers lifted the Fed’s target for its benchmark rate by a quarter percentage point to a range of 4.5% to 4.75%. The smaller move followed a half-point increase in December and four jumbo-sized 75 basis-point hikes prior to that.
“We think we’ve covered a lot of ground,” Powell told reporters after the meeting. “Even so, we have more work to do.”
Investors took heart from Powell’s remarks acknowledging that price pressures have started to ease, even though he reiterated the Fed’s outlook for more rate hikes. The S&P 500 climbed after briefly falling to session lows as he spoke and two-year yields fell.
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“The committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” the Fed said in a statement issued after the two-day policymaking meeting, repeating language it has used in previous communications.