Fed pauses rate hikes for second time this year, but hints at another increase

foxbusiness.com:

Americans have been crunched by inflation and interest rates.

The Federal Reserve on Wednesday held interest rates steady for the second time this year, pausing its tightening campaign to assess how the economy is faring in the face of higher borrowing costs. 

The widely expected decision left interest rates unchanged at a range of 5.25% to 5.5%, the highest level since 2001. But policymakers also left the door open to an additional increase before the end of the year – and indicated that rates are likely to remain at peak levels longer than previously expected.

New economic projections laid out after the meeting show that a majority of Fed officials who participated in the meeting expect rates to rise to 5.6% by the end of 2023, suggesting one more quarter-point increase this year. The Fed meets two more times this year, in November and December.

«We're prepared to raise rates further, if appropriate, and we intend to hold policy at a restrictive level until we're confident that inflation is moving down sustainably toward our objective,» Chairman Jerome Powell told reporters at a post-meeting press conference in Washington.

FED SKIPS AN INTEREST RATE HIKE, BUT HIGH MORTGAGE RATES COULD BE HERE TO STAY

The central bank is projecting a peak rate of 5.6%, indicating that policymakers believe there is still more work to be done to wrangle inflation under control. Twelve of the 18 policymakers predicted one more quarter-point rate hike, while six supported keeping rates unchanged.

The meeting comes one week after the Labor Department reported the consumer price index, a key measure of inflation, accelerated 0.6% in August. It marked the steepest monthly increase this year. On an annual basis, prices rose 3.7%. While that is