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The Federal Reserve headquarters building in Washington.Photo: Stefani Reynolds\/AFP <\/p>\n
The Federal Reserve slowed down its campaign of interest rate increases Wednesday, raising its target interest rate a quarter percentage point after months of more aggressive steps and signaled that more increases are ahead.<\/p>\n
Why it matters: <\/strong>The Fed raised interest rates at a breakneck pace last year as inflation soared. Now they have further slowed the pace of hikes, but Fed chair Jerome Powell emphasized that the central bank's job is not done and warned that the economy is only in the early stages of easing inflation.<\/p>\n Where it stands<\/strong>: Inflation has come down alongside a labor market that has remained solid \u2014 and, by some measures, strengthened. <\/p>\n Between the lines:<\/strong> The committee kept language in its statement that it "anticipates that ongoing increases in the target range will be appropriate" to return inflation to 2%. <\/p>\n The intrigue: <\/strong>Alongside the issues of inflation and employment, there is also another potential issue brewing that will inevitably involve the Fed: The possibility that Congress does not raise the debt ceiling. <\/p>\n Catch up quick: <\/strong>The Fed raised rates seven times in 2022, including four times in super-sized 0.75 percentage point increments in an effort to bring down inflation. That created the most rapid tightening of monetary policy in decades and sent ripples across global financial markets.<\/p>\n\n
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