Federal Reserve keeps interest rates in place

Federal Reserve Chairman Jerome Powell on Wednesday said the U.S. central bank would keep its key interest rate at roughly 5.25 percent to 5.5 percent. He added that the economy had yet to feel the full effects of the Fed’s 11 previous rate hikes over the past year and a half. Powell said the Fed still aimed to bring annual inflation back down to 2 percent.

Why is the Federal Reserve pausing interest rate increases this time? Powell said that slowing down rate hikes would give the central bank more time and information to properly assess how much higher to raise interest rates if needed. He also reported that the Fed had made progress in reducing inflation.

Dig deeper: Listen to Nick Eicher’s discussion with David Bahnsen on The World and Everything in It podcast about strong employment, the Fed, and high prices.