Central Banks

What to Watch as Fed Readies to Pause With One Last Hike

Chair Powell will likely signal further moves depend on data
Decision to be released at 2 p.m. Wednesday in Washington

WATCH: Fed policymakers are expected to raise borrowing costs by 25 basis points before signaling a pause in the central bank’s aggressive hiking cycle. Valerie Tytel has a preview.Source: Bloomberg

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By Catarina Saraiva and Jonnelle Marte

May 2, 2023 at 8:57 PM UTC

Updated on

May 3, 2023 at 4:10 AM UTC

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The Federal Reserve is expected to deliver a 25 basis-point interest-rate increase and signal a pause in its aggressive hiking campaign, amid persistent financial-market turmoil and renewed pressure from lawmakers to back off.

Fed watchers expect the US central bank will deliver its final rate hike for a while on Wednesday, with tighter lending conditions and signs of a slowing economy suggesting inflation will cool more meaningfully in the months ahead. The move would bring the federal funds rate to a range of 5% to 5.25%, the highest since 2007.