The Federal Reserve raised interest rates again on Wednesday and warned there are still more to come.
The Fed raised its key short-term interest rate by half a percentage point to a range of 4.25 to 4.5 percent, its highest level in 15 years.
The move will further increase the cost of consumer and business loans and may still intensify the prospect of a recession.
Federal Reserve Chairman Jerome Powell said in a statement that he still believes it is possible to avoid a recession but warned that rate cuts are unlikely for 2023.
“Historical experience cautions strongly against prematurely loosening policy. I wouldn’t see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way,” he told reporters at a news briefing.
“To the extent we need to keep rates higher and keep them there for longer inflation. . . I think that that narrows the runway, but lower inflation readings, if they persist in time, could certainly make it more possible,” Powell said.
“I just don’t think anyone knows whether we’re going to have a recession or not, and if we do, whether it’s going to be a deep one or not,” he said. “It’s not knowable.”
