Federal Reserve pauses rate hikes as inflation slows down
The Federal Reserve has decided to pause its recent rate hikes as inflation slowed in the U.S. The central bank made the decision at its monetary policy meeting on Wednesday, citing that the current environment of low inflation offered the opportunity to take pause. The Federal Open Market Committee (FOMC) voted unanimously to keep the target federal fund rate in the range of 2.25-2.50%, and signaled that it was “content to maintain the current stance” amid the ongoing trade tensions. The pause, a change from the four increases seen in 2018, indicates that the Fed is taking an increasingly dovish stance on interest rate hikes. While the FOMC did note that “growth of economic activity has been strong” and noted that “the labor market has continued to strengthen,” it also “downgraded” its outlook for inflation, noting that it was “running below” the target of 2%. With the pause, the Fed is giving itself some breathing room to see how the prolonged trade negotiations play out, while also allowing inflation to catch up to the desired level.