Federal Reserve officials paused their series of interest-rate hikes but projected borrowing costs will go higher than previously expected, owing to what Chairman Jerome Powell called surprisingly persistent inflation and labor-market strength.
Powell, speaking to reporters in a news conference Wednesday, faced the challenging task of explaining two possibly contradictory policies: deciding to leave rates unchanged following 10 straight hikes while also indicating that at least two more increases might be necessary this year, possibly as soon as July.
"The committee thought overall that it was appropriate to moderate the pace, if only slightly,” Powell said. "That gives us more information to make decisions. We may try to make better decisions. It allows the economy a little more time to adapt as we make our decisions going forward.”