Key Takeaways From Fed Rate Pause and Forecasts for Further Hikes

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Key Takeaways From Fed Rate Pause and Forecasts for Further Hikes

Here are key takeaways from the Federal Reserve's interest-rate decision and statement on Wednesday:

  • Federal Open Market Committee unanimously holds benchmark rate in target range of 5%- 5.25%, as expected, in first pause since starting cycle of increases in early 2022, to “assess additional information and its implications for monetary policy”

  • New projections show policymakers favor a half-point of additional increases this year, which would push borrowing costs to about 5.6% -- higher than most economists and investors have been expecting

  • FOMC statement gives clear signal that policymakers will resume tightening by referring to the “extent of additional policy firming that may be appropriate”; prior statement, in May, gave more leeway on whether to hike

  • Forecasts for economic growth and core inflation rose for 2023, while unemployment projections fell

  • Fed says economy has expanded at modest pace with robust job gains and low unemployment; inflation remains “elevated”

(Bloomberg) -- For Bloomberg's TOPLive blog on the Fed decision and press conference, click here

More stories like this are available on bloomberg.com

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