Fed issues smaller interest rate hike, says more hikes possible

Federal Reserve Chair Jerome Powell said on Wednesday that the central bank would raise its key interest rate by one-quarter of a percentage point. This is the Federal Reserve’s eighth rate hike since March of last year, and Powell said it likely will not be the last. He said until the Fed sees more evidence that inflation is on a sustained decline, it won’t consider ceasing rate hikes.

Does the Fed not think inflation is slowing? The Fed has acknowledged it is slowing, and Powell said “the disinflationary process has started.” But Powell also seemed to credit smoother supply chains, rather than slowing inflation, for many price drops.

Dig deeper: Read Jerry Bowyer’s column in WORLD Opinions on how investors have given the U.S. economy a no-confidence vote for 2023.