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Fed officials have raised rates quickly over the past year to try to curb inflation, raising rates from near zero a year ago to just under 5 percent this month. But politicians have suggested they are nearing the end, predicting another rate hike this year. Jerome H. Powell, the chairman of the Fed, hinted that officials might stop adjusting policy altogether if problems in the banking sector hit the economy hard enough.
“As we assess the need for further increases, we will focus on incoming data and evolving forecasts, and in particular our assessment of the actual and expected impact of credit tightening,” Mr. Powell said at a news conference after the Fed meeting. . last rate decision last week. At this meeting, the central bank raised rates by a quarter of a point.
But inflation remains unusually fast: while slowing, it is still more than double the Fed’s 2 percent target. The banking turmoil seems to be subsiding and government officials say deposit flows have stabilized in recent days.
Officials speaking this week suggested they may have to do more to fight price increases and dismissed market speculation that they might cut rates this year.
“Inflation remains too high and the latest numbers confirm my view that there is still much to be done,” Susan Collins, president of the Federal Reserve Bank of Boston, said in a speech Thursday. Miss Collins will not be voting this year.
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