Federal Reserve officials announce pause in US interest-rate hikes

A home development in Sewickley, Pennsylvania. Interest rates make borrowing money, particularly for mortgages or other loans, like car payments and student loans, more expensive. Photograph: Gene J Puskar/AP

US Federal Reserve officials have announced a pause in interest-rate hikes, leaving rates at 5% to 5.25% after more than a year of consecutive rate increases.

The decision, made by the Fed’s Federal Open Market Committee (FOMC), marks a shift in how Fed officials view the state of inflation, which reached a 40-year high of 9.1% in June last year as food and energy costs soared. Inflation in May was down to 4%, the lowest since April 2021.