The vote to skip a rate increase this meeting was unanimous. Since March 2022, Fed officials have raised the central bank’s benchmark interest rate 10 times in a row in an attempt to cool the US economy and battle inflation that is still double the Fed’s target. The Fed’s post-meeting statement confirmed that officials deem the pause a prudent move, but most officials think additional hikes are necessary this year, according to the Fed’s latest Summary of Economic Projections.
Top economists argue the still-tight labor market will prove to be a stubborn source of inflation that would need to rebalance in order to help inflation successfully fall to the central bank’s 2% target. Most officials in the Federal Open Market Committee, which sets monetary policy, expect the unemployment rate to rise to a range of 4-4.1% this year. Officials are also keeping a close watch on how credit conditions shape up, considering some lingering stress in the regional banking sector.