U.S. Fed pauses hike of interest rates

Photo taken on June 1, 2022, shows the U.S. Federal Reserve in Washington, D.C., the United States. (Xinhua/Liu Jie)

Notably, monetary policy makers from the Fed raised their projection of the federal fund rate for 2023 to 5.6 percent from 5.1 percent in March, which indicates that the Fed could resume hiking the interest rate after the pause.

NEW YORK, June 14 (Xinhua) -- The U.S. Federal Reserve on Wednesday kept the target range of the federal funds rate unchanged at 5 percent to 5.25 percent, following a slew of 10 consecutive hikes since March 2022.

"Holding the target range steady at this meeting allows the committee to assess additional information and its implications for monetary policy," the Federal Open Market Committee (FOMC) said in a statement issued on Wednesday afternoon, after concluding its latest two-day policy meeting.

The pause of interest rate hikes was widely expected as the year-on-year growth rate of the U.S. consumer price index slowed down to 4 percent in May, from a peak of 9.1 percent in June 2022.

The Federal Reserve reiterated that it is strongly committed to returning inflation to its 2 percent target and will continue reducing its holdings of Treasury securities, agency debt and agency mortgage-backed securities as planned.

To tame inflation, the Fed has staged an aggressive monetary tightening through lifting the federal fund rate by 500 basis points accumulatively.

Notably, monetary policy makers from the Fed raised their projection of the federal fund rate for 2023 to 5.6 percent from 5.1 percent in March, which indicates that the Fed could resume hiking the interest rate after the pause.

They cranked up their forecast for core personal consumption expenditure inflation for 2023 to 3.9 percent, up from 3.6 percent in March, according to a summary of economic projections issued by the FOMC.

Meanwhile, the projection for real GDP growth in 2023 went up to 1 percent in 2023 from the earlier expectation of 0.4 percent, and the forecast of unemployment rate in 2023 fell to 4.1 percent from 4.5 percent in March.