Federal Reserve Holds Rates, Forecasts 2 More Hikes in 2023

The Federal Reserve kept rates steady, but signaled readiness for future hikes this year to combat inflation. The benchmark rate remains at 5%-5.25%, the first no-change decision since January 2022. Interest rate forecasts for this year increased, with potential rates reaching 5.6%, suggesting two more hikes are likely. Inflation concerns persist, and Chair Jerome Powell stated that reaching the Fed’s target will take time. Next year, rates are expected to fall by 100 basis points to around 4.6%. Powell emphasized that the pause allows the economy to adapt and assess the consequences of recent banking disruptions.

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