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Special Report

Financial Markets Research Brief

June 2023

Fed Takes a Rate Hike Hiatus,
Granting Investors Time to Calibrate

Federal Reserve pauses in June to assess data. The Federal Open Market Committee held their policy rate flat at a lower bound of 5 percent at the June meeting. This is the first time the FOMC has not raised the federal funds rate at a meeting since before March 2022. The pause does not, however, imply an end to the current tightening cycle. The Federal Reserve is continuing to reduce its balance sheet, with the June rate pause allowing time for the FOMC to assess the cumulative impact of their policy decisions so far. Chairman Powell reiterated that the Fed will continue to take a data-dependent path going forward, and may lift the lending rate one or more times this year if warranted by labor and financial market conditions.

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