Federal Reserve pauses rate hikes as inflation slows down

The Federal Reserve has indicated that it is pausing its policy of gradually raising interest rates in response to an expected slowdown in the rate of inflation. This move acknowledges the softening of the inflation rate in recent months and the fact that unemployment remains near historical lows.


In a statement released after its meeting on Wednesday, the Fed said it is “assessing its current monetary policy stance” and will “take a patient approach to determining future adjustments to the target range” for the federal funds rate.

The decision to pause was largely expected by Wall Street analysts and investors, with the Fed having raised interest rates eight times since late 2015. At its December meeting, the Fed had signaled it was expecting to raise rates two more times this year.

The move is largely seen as an effort to prevent the economy from slowing down due to rising interest rates. With the job market tight and economic growth still running at a healthy pace, a pause in rate hikes could provide the economy with a cushion to keep growing.

The Fed also said that it will “continue to monitor inflation developments closely” but that it remains confident that inflation will move back to its 2 percent target over the medium term.

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