Policymakers are grappling with how much pressure to keep on an economy that has proved remarkably resilient to the highest borrowing costs in decades.
The Federal Reserve is poised to leave interest rates unchanged Wednesday, as policymakers grapple with how much more pressure to keep on an economy that has largely shrugged off the central bank’s moves to slow it down.boomeranged back from the coronavirus pandemic, the central bank sprinted to hoist interest rates starting in March 2022. Policymakers brought borrowing costs to the highest level in 22 years, with the Fed’s benchmark interest rate now falling between 5.25 and 5.5 percent.
now, Fed leaders have left the door open for another quarter-point hike before the end of the year. But policymakers will only meet one more time before 2024, and it’s unclear what wouldFed leaders will hold rates at elevated levelsPart of the reason Fed officials have been hesitant to hike again is because of a recent run-up in government bond yields, a crucial benchmark that supports borrowing rates worldwide.
The job market hasn’t cratered, either. In past remarks, Powell pointed to some signs of slowing, like fewer job openings and wages that are increasing at a more moderate pace. But the unemployment rate is still at a hot 3.8 percent, and employers have added jobs for 33 months straight.“If you think back a year, many forecasts called for the U.S. economy to be in recession this year,” Powell said inbefore the Economic Club of New York last month.
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