Federal Reserve officials are ready to take a breather after more than a year of driving up interest rates — a move that’s likely to be accompanied by a strong signal that they’re prepared to keep hiking if needed.
Policymakers are expected to leave rates in a range of 5% to 5.25% at their June 13-14 meeting, allowing them to take stock of the outlook following recent strains in the banking sector. But Chair Jerome Powell will also have to placate a number of officials who worry progress on inflation has stalled and say the Fed may need to do more to cool a surprisingly resilient economy.
"They seem intent on taking a timeout at the June meeting next week to continue to assess banking sector stresses and make sure there aren’t any lurking issues,” said Brett Ryan, senior U.S. economist at Deutsche Bank. "But with a stronger labor market and really no signs of progress in those inflation metrics that Powell has highlighted, the Fed’s got more work to do.”