Central Banks
Fed Signals Yield Rise Reduces Need to Hike, But Door Still Open
- Powell says financial conditions have tightened significantly
- Decision to keep main rate at 5.25%-5.5% was unanimous
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The Federal Reserve signaled that a run-up in long-term Treasury yields reduces the impetus to raise interest rates again, even as Chair Jerome Powell left the door open to another hike to tame inflation.
While Powell indicated policymakers could raise rates when they meet next month, he also allowed that officials may be done with their tightening campaign. He said he wasn’t yet confident to judge whether monetary policy was restrictive enough to bring inflation back to the Fed’s 2% target.