The Federal Reserve kept its key interest rate unchanged after having raised it 10 straight times to combat high inflation. But in a surprise move, the Fed signaled that it may raise rates twice more this year, beginning as soon as next month. The Fed’s move to leave its benchmark rate at about 5.1%, its highest level in 16 years, suggests that it believes the much higher borrowing rates it’s engineered have made some progress in taming inflation. But top Fed officials want to take time to more fully assess how their rate hikes have affected inflation and the economy. The central bank’s 18 policymakers envision raising its key rate by an additional half-point this year, to about 5.6%.
Well, the interest rates are now higher than the inflation rate. The goal (communicated by the Fed) was to stop inflation. It trends downwards for 11 months now. The only reason to continue with interest hikes in their opinion should be if the inflation in fall ist still between 3 and 4%.