The Fed Just Hinted At Raising Interest Rates Again

( – After 10 consecutive months of raising interest rates to combat inflation from 2022 to 2023, the Federal Reserve announced that it will halt rate increases, according to The Washington Examiner. The pause comes as inflation continues to slow, but many are expecting the rates to resume.

The Fed’s goal is to have rates reach 5 to 5.25 percent as rates are the highest they have been since 2007. Projections of the central bank indicate that they are expecting to increase rates two more times over the next year. Chairman Jerome Powell went so far as to say that the hikes have yet to be felt in the economy. The comment is surprising to some who have noted the rising mortgage rates, which have momentarily decreased as rising interest rates were paused. 

The housing market is considered to be in a recession because of its falling prices, down from a peak in 2020 when the Fed cut interest rates to near zero. 

The pause reportedly signals two possibilities: that the Fed wants to ease up on rates as the economy slows down, fearing that there are larger threats than inflation and that inflation is slowing down. The Fed has also updated its projections of unemployment, which it speculates will uptick by 4.1 percent, up from 3.7 percent today. 

This increase in unemployment reportedly signifies how rising rates have constrained the economy. Nevertheless, the labor market is allegedly strong given the hikes. While those who are looking for jobs will be hurt most, inflationary pressure will reportedly continue to ease. 

Inflation projections have remained largely unchanged. A previous March projection put it at 3.3 percent, but it now sits at 3.2 percent by the end of the year. While the Fed is worried about a slowing economy, Gross Domestic Product (GDP) predictions suggest a rise from 0.4 to 1 percent. 

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