After This Interest Rate Hike, Will the Fed Finally Hit Pause?

Update: As expected, the Federal Reserve’s Open Markets Committee raised the federal funds rate 25 basis points to 5 to 5.25 percent at its meeting today. The committee will also continue to reduce its securities holdings. In terms of whether or not it would pause rate hikes, the committee said it would monitor the situation and remain committed to getting inflation back to 2 percent. “We are prepared to do more if further monetary restraint is warranted,” said Federal Reserve Chairman Jerome Powell at a press conference following the announcement.  

Another 25 basis-point increase in interest rates is widely anticipated after the Federal Reserve’s Open Markets Committee meets on May 2-3. The Fed’s recent public statements, as well as its recent moves to raise rates, strongly signal one more hike to industry observers. On the heels of several major bank failures, and with an economic downturn a strong possibility, the Fed’s primary focus continues to be reducing inflation to its stated target of 2 percent....