Federal Reserve officials paused their series of interest-rate hikes but projected borrowing costs will go higher than previously expected, owing to what Chairman Jerome Powell called surprisingly persistent inflation and labor-market strength.
Powell, speaking to reporters in a news conference Wednesday, faced the challenging task of explaining two possibly contradictory policies: deciding to leave rates unchanged following 10 straight hikes while also indicating that at least two more increases might be necessary this year, possibly as soon as July.
¡°The committee thought overall that it was appropriate to moderate the pace, if only slightly,¡± Powell said. ¡°That gives us more information to make decisions. We may try to make better decisions. It allows the economy a little more time to adapt as we make our decisions going forward.¡±
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