News Digest: Fed hints at more rate hikes in 2023 to fight inflation
June 23, 2023
The Federal Reserve has warned of more rate hikes during the year as part of its measures to curtail inflation in the United States. Chairman Jerome Powell told a House of Representatives Committee that inflation remained high and the efforts to bring it below 2% would continue.
However, in spite of this warning, the Fed had kept the rates unchanged earlier in June after ten straight hikes. This was done to gauge how the higher borrowing rates have affected the economy, Powell said during his testimony, according to a news report.
Market analysts said the contrast between the Fed’s comments over high inflation and its decision to skip a rate hike resulted in heightened uncertainty with some expecting Powell to strike a balance between demands of further interest rate hikes and keeping them stable. The Fed chairman said slowing the pace of hikes without risking deep recession was the motive.