Fed Pauses Interest Rate Hikes, but Rates May Remain High Longer

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.