The Fed decided to keep the key rate unchanged at 5-5.25% at its June meeting, taking a break after 10 straight rate hikes.
The pause is expected to give officials more time to see how the economy reacts to their actions and may help them avoid overdoing their policy response to rapid inflation.
Yet central bankers are also predicting that they will raise interest rates two more times in 2023 – a surprise to Wall Street, which had expected only a single rate hike in July.
That means that borrowing money could still become more expensive – and it’s a signal that Fed officials do not think their work is done when it comes to wrestling down rapid inflation.