The Federal Reserve has increased its benchmark rate by 25 basis points to 5.1%, continuing its drive to cool inflation. This is the Fed's 10th straight hike; the benchmark rate is the highest in 16 years. However, with the market expecting a pause in its latest policy meeting, the Fed did not mention "Some additional" rate hike being needed, contrary to its previous statement.
According to Chairman Jerome Powell, Fed officials can step back and assess the impact of the higher rates on growth and inflation as well as monitor other factors, including the turmoil in the banking sector, to determine whether it is time to pause the rate increase that which is to be set on a meeting-to-meeting basis. Chair Powell noted, "We may not be far off - or possibly even at that level" when asked if the Fed's key rate was high enough to restrain the economy and curb inflation.
