Fed Pauses Interest Rate Hikes, but Rates May Remain High Longer
Summary from AllSides News Team
The Federal Reserve declined to change interest rates on Wednesday but suggested rates would remain high for longer, according to analysis from multiple outlets.
Key Quotes: “The fact that we decided to maintain the policy rate at this meeting doesn't mean that we've decided that we have or have not, at this time, reached that stance of monetary policy that we're seeking,” Fed Chairman Jerome Powell said. The Fed also updated some characterizations of the economy in its regularly-released meeting statement, saying economic activity was expanding at a “solid” pace instead of “moderate” one, and saying job gains “have slowed in recent months but remain strong” instead of calling employment “robust.”
For Context: The Fed has raised interest rates 11 times since March 2022 to combat high inflation by raising borrowing costs and slowing economic activity. In recent months, 12-month inflation has slowed to 3.2% in July and 3.7% in August — much lower than June 2022’s 9.1% peak but still higher than the Fed’s 2% target. The Fed balances its inflation goals with pursuing “maximum employment.”
How the Media Covered It: Coverage was common and generally similar in business outlets regardless of bias rating. However, a Fox Business (Lean Right bias) homepage headline said the Fed’s decision “will likely keep your 'American Dream' on hold,” although it was not specified which “American dream” Fox was referring to.
Featured Coverage of this Story
From the CenterFed declines to hike, but points to rates staying higher for longer
The Federal Reserve held interest rates steady in a decision released Wednesday, while also indicating it still expects one more hike before the end of the year and fewer cuts than previously indicated next year.
That final increase, if realized, would do it for this cycle, according to projections the central bank released at the end of its two-day meeting. If the Fed goes ahead with the move, it would make a full dozen hikes since the policy tightening began in March 2022.
Markets had fully priced in no move...
From the RightFed pauses rate hikes for second time this year, but hints at another increase
The Federal Reserve on Wednesday held interest rates steady for the second time this year, pausing its tightening campaign to assess how the economy is faring in the face of higher borrowing costs.
The widely expected decision left interest rates unchanged at a range of 5.25% to 5.5%, the highest level since 2001. But policymakers also left the door open to an additional increase before the end of the year – and indicated that rates are likely to remain at peak levels longer than previously expected.
New economic projections laid out after...
From the LeftThe Fed hits pause on interest rate hikes while it reviews more data
The Federal Reserve said Wednesday it will pause its rate hikes, keeping its benchmark lending rate at a 22-year high.
The move was widely expected, after the central bank signaled in recent weeks that it intended to wait for more data to understand how previous rate hikes are affecting the US economy.
Since March 2022, the Fed has lifted interest rates 11 times and held them steady twice, including September’s pause.
The central bank’s latest post-meeting statement said “economic activity has been expanding at a solid pace,” compared with a...