President Joe Biden’s pick to be the Fed’s second-in-command said as much on Wednesday, but cautioned that it doesn’t mean the Fed can’t resume rate increases if needed. That’s essentially the argument for a pause. Kevin Dietsch/Getty Imagesįederal Reserve officials are growing skeptical about suspending rate hikes ![]() Many economists, including those at the Fed, still expect a recession later in the year.Ī pedestrian walks past the Federal Reserve Headquarters on Main Washington, DC. ![]() Some officials have said a pause would allow them to assess the impacts of the central bank’s most aggressive rate-hiking campaign since the 1980s and some have also cautioned of additional factors expected to further slow economic activity, such as tougher lending standards, along with other lagged effects of tighter monetary policy. ![]() That would snap a streak of 10 consecutive rate hikes that raised the central bank’s benchmark lending rate to a range of 5-5.25%, the highest level in more than 15 years. The debate over suspending rate increases or hiking yet again later this month has remained intense, and May’s robust jobs report certainly makes it even more difficult to decipher what’s going on in the economy, but there seems to be enough of an argument for Fed officials to defend a pause, or a “skip,” in rate increases when they meet on June 13-14. But Federal Reserve officials are still likely to suspend rate hikes in their upcoming policy meeting because of broader trends pointing to a weakened economy later in the year. ![]() The US labor market picked up momentum in May, once again defying expectations of a slowdown.
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