The Federal Reserve’s target rate was maintained at 5.25–5.5%, the highest level in over 20 years, by the decision.
The Federal Reserve is debating whether rising borrowing costs have adequately relieved the pressures driving up prices.
By year’s end, officials stated, they still planned to lower rates.
However, the bank is moving gingerly now after sharply increasing borrowing fees in 2022 in reaction to skyrocketing prices.
Fed Chairman Jerome Powell stated, “We want to be careful, and fortunately we can” since the economy is expanding, the labor market is robust, and inflation is declining.
A day before the Bank of England makes its own interest rate announcement, the Fed makes its move. Additionally, it is anticipated to keep UK interest rates at their current, 15-year high of 5.25%.
Theoretically, higher interest rates reduce inflation by increasing the cost of borrowing, slowing the growth of the economy, and reducing the forces driving up prices.
