Federal Reserve announces small interest rate hike as inflation appears to slow
The Federal Reserve announced Wednesday it was raising interest rates by 0.25 percent, the latest in a series of ongoing rate hikes aimed at slowing inflation.
"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 two percent over time," the Federal Reserve said in a statement.
The rate increase didn't come as much of a surprise to financial insiders, as CME Group data showed the market had predicted a 98 percent chance of the quarter interest bump. CNBC noted that where there is often a strong consensus in financial circles heading into Federal Reserve meetings, "it's rarely this high."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Given the rising inflation seen over the last year, the Federal Reserve has been on a consistent push to increase interest rates since last March. However, Bloomberg noted that, as there begin to be signs of flatlining inflation, the small 0.25 hike is an indicator that the Federal Reserve is ready to "slow its inflation-fighting campaign without signaling a readiness to stop.
Bloomberg's financial index noted monetary problems in the U.S. have slowed to their tiniest impact in a year, as indicated by declining mortgage rates that have fallen from 7.08 percent back to 6.13 percent. Additional factors such as rising commodity prices and a weakening U.S. dollar have contributed to optimism about the economy.
However, despite the potential decline of inflation, experts said the Federal Reserve needed to maintain caution when tapering off rate hikes.
"Passing peak inflation is welcome and policymakers appear to have increased confidence that inflation is on a downward path," analysts at Bank of America wrote, per NBC News. "But the Fed is not yet convinced that inflationary pressures will dissipate quickly."
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Justin Klawans has worked as a staff writer at The Week since 2022. He began his career covering local news before joining Newsweek as a breaking news reporter, where he wrote about politics, national and global affairs, business, crime, sports, film, television and other Hollywood news. Justin has also freelanced for outlets including Collider and United Press International.
-
Cicada-geddon: the fungus that controls insects like 'zombies'
Under The Radar Expert says bugs will develop 'hypersexualisation' despite their genitals falling off
By Chas Newkey-Burden, The Week UK Published
-
'Voters know Biden and Trump all too well'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
Is the Gaza war tearing US university campuses apart?
Today's Big Question Protests at Columbia University, other institutions, pit free speech against student safety
By Joel Mathis, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published
-
Housing costs: the root of US economic malaise?
speed read Many voters are troubled by the housing affordability crisis
By Peter Weber, The Week US Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published