Federal Reserve officials agreed to hold interest rates steady after 10 consecutive increases but signaled they were prepared to raise rates next month if the economy and inflation don’t cool more. New economic projections, released Wednesday after their two-day policy meeting, strongly suggested officials were leaning toward slowing down their increases rather than stopping them altogether. Most of them penciled in two more rate increases this year, which would lift them to a 22-year high, and boosted their expectations for growth and inflation. The Fed fights inflation by slowing the economy through raising rates, which causes tighter financial conditions such as higher borrowing costs, lower stock prices and a stronger dollar. Officials had signaled growing disagreement in recent weeks over whether to keep raising rates. “We don’t know the full extent of the consequences of the banking turmoil that we’ve seen,” Powell said Wednesday. “It would be early to see those.” Other Fed officials have expressed more concern that inflation, hiring and consumer spending haven’t slowed more.
Source: WSJ.com: US Business
