Fed raises rates but signals a pause in rate-hiking ahead
- June 1, 2023: Vol. 35, Number 6

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Fed raises rates but signals a pause in rate-hiking ahead


The Federal Open Market Committee voted to increase the target federal funds rate by 25 basis points at its May 3 meeting, for a target range of 5.0 percent to 5.25 percent. In addition, the Fed appeared to signal that it may be ready to pause its rate-hiking cycle, removing language from its post-meeting statement about the need for “some additional policy firming.”

The Fed has raised rates 5.0 percent since it began its rate hiking in early 2022 as part of its efforts to curb inflation. But the higher-interest-rate environment has posed challenges for the banking sector. At the end of April, First Republic Bank was seized by regulators and acquired by JPMorgan Chase. Other prominent bank failures include Silicon Valley Bank and Signature Bank, as well as Credit Suisse, which avoided failure by being acquired by UBS.

In a press conference discussing the, Fed chair Jerome Powell acknowledged the challenges that higher rates have posed for some sectors of the econom

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