UNITED STATES NEWS

Federal Reserve Chair Powell hints at a pause in rate hikes when central bank meets next month

May 20, 2023, 6:00 PM

WASHINGTON (AP) — Chair Jerome Powell indicated Friday that the Federal Reserve will likely forgo an increase in its benchmark interest rate when it meets in June for the first time since it began raising its key rate 14 months ago to fight high inflation.

In signaling so, Powell provided some clarity about the Fed’s likely next policy move after a cacophony of speeches this week by central bank officials had clouded the picture.

“Having come this far, we can afford to look at the data and the evolving outlook and make careful assessments,” Powell said, referring to the Fed’s 10 straight rate hikes, which have elevated its key short-term rate from near zero a year ago to about 5.1%, its highest level in 16 years.

Speaking at a Fed conference in Washington, Powell said the central bank’s benchmark rate, which affects many consumer and business loans, is now high enough to restrain borrowing, spending and economic growth. Fed officials hope that slower growth will cool inflation over time.

The Fed chair also suggested that “the risks of doing too much versus doing too little are becoming more balanced.” That marks a shift from earlier this year, when Powell often said the risk of raising rates too little to combat inflation outweighed the risk of raising them so high as to cause a deep recession.

Powell’s remarks Friday followed a series of comments from Fed officials this week that conveyed decidedly mixed messages about the central bank’s likely next move.

Most of the policymakers signaled support for a pause at its next meeting. But several others expressed their belief that the Fed would have to further raise rates to curb persistent inflation. Lorie Logan, president of the Federal Reserve Bank of Dallas, said Thursday that inflation remained too high and that the latest economic data didn’t yet justify a pause in hikes.

Inflation, under the Fed’s preferred measure, has declined but remains far above the central bank’s 2% annual target. Inflation was 4.2% in March, compared with a year earlier. Still, inflation has slowed from 7% last June to 4.2% as of March, according to the Fed’s preferred price gauge.

 

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

United States News

FILE - Bishop Lamor Miller-Whitehead speaks with the media, May 24, 2022, in New York. The Brooklyn...

Associated Press

Brooklyn preacher goes on trial for fraud charges prosecutors say fueled lavish lifestyle

NEW YORK (AP) — A Brooklyn preacher with ties to New York City Mayor Eric Adams is set to go on trial Monday in Manhattan federal court over charges that he looted a parishioner’s retirement savings and tried to extort a businessman to fuel his lavish lifestyle. Lamor Miller-Whitehead, 47, a Rolls Royce-driving bishop, faces […]

2 hours ago

FILE - Alexander Smirnov, second from right, leaves the courthouse on Feb. 20, 2024, in Las Vegas. ...

Associated Press

Ex-FBI informant charged with lying about Bidens will appear in court as judge weighs his detention

LOS ANGELES (AP) — A former FBI informant charged with fabricating a multimillion-dollar bribery scheme involving President Joe Biden’s family is set to appear in a California federal court on Monday as a judge considers whether he must remain behind bars while he awaits trial. Special counsel David Weiss’ office is pressing U.S. District Judge […]

2 hours ago

Rock Creek Forest Elementary School students exit a diesel bus before attending school, Friday, Feb...

Associated Press

Demand for electric school buses finally starts to make headway

Electric school buses have been driving in California for nearly a decade but the demand for more across the country has been increasing.

5 hours ago

leap day...

Associated Press

How did leap day begin and why? A look by the numbers

How did leap year begin and why? A look at some of the numbers, history and lore behind the (not quite) every four-year phenom.

7 hours ago

Associated Press

AT&T will give $5 to customers hit by cellphone network outage

DALLAS (AP) — AT&T says it will give affected customers $5 each to compensate for last week’s cellphone network outage that left many without service for hours. The Dallas-based company said on its website that customers will get the $5 credit on their account within two billing cycles. The credit does not apply to AT&T […]

7 hours ago

FILE - President Joe Biden speaks in the East Room of the White House, Feb. 23, 2024, in Washington...

Associated Press

Biden is summoning congressional leaders to the White House to talk Ukraine and government funding

WASHINGTON (AP) — President Joe Biden will convene the top four congressional leaders at the White House on Tuesday to press lawmakers on passing an emergency aid package for Ukraine and Israel, as well as averting a looming government shutdown next month, according to a White House official. The top four leaders include House Speaker […]

8 hours ago

Sponsored Articles

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

...

Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

(KTAR News Graphic)...

Boys & Girls Clubs

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

Federal Reserve Chair Powell hints at a pause in rate hikes when central bank meets next month