The Federal Reserve on Wednesday held interest rates steady for the first time in 15 months, pausing its aggressive tightening campaign to assess how the economy is faring in the face of higher borrowing costs.
The widely expected and unanimous decision left interest rates at a range of 5% to 5.25%, the highest level since 2007. But policymakers also left the door open to additional rate increases this year.
“Holding the target range steady at this meeting allows the committee to assess additional information and its implications for monetary policy,” the Federal Open Market Committee said in a post-meeting statement. The Fed’s next meeting is set for July 25-26.
New economic projections laid out after the meeting show that a majority of Fed officials who participated in the meeting expect rates to rise to 5.6% by the end of 2023, suggesting two more quarter-point increases this year.
The central bank previously projected a peak rate of 5.1%, indicating that policymakers believe there is more work to be done to wrangle inflation under control.