Fed Pivot Is Dead. Long Live the Fed Pirouette.
The central bank is probably done raising rates, but it wants to keep the markets second-guessing.
The Fed soft-shoe.
Photographer: Kevin Dietsch/Getty Images
The Federal Reserve is most likely done raising interest rates this cycle. It just wants everyone to believe otherwise. That was evident in the statement the central bank released on Wednesday to explain its decision for increasing its main rate by a quarter of a percentage point as expected, downshifting from the half-point increase in December. Here’s they key part:
Two things stand out. The first is that it just repeats the language policymakers used in previous statements when they were lifting rates by greater amounts to combat raging inflation. Some market participants had expected the Fed to replace “ongoing increases” with softer language such as “some increases.”