The Fed hiked interest rates by 0.25% in February to 4.5% – 4.75% as it continues to combat inflation.
Investors and economists alike expected an 0.25% hike as inflation had shown signs of cooling down over the past few months. However, the Fed indicated that the hikes will proceed until inflation is brought down from its “elevated” level.
Although the battle with inflation is not over yet, Fed Chair Jerome Powell did mention that the disinflationary process has begun, with the optimistic comments in Powell’s statement improving sentiment in investors.
The Fed will continue to assess the impact of the interest rate hikes going forward, as slowing inflation gives leeway for continued smaller interest rate hikes.