Fed Officials Signal More Rate Hikes in 2023, Meeting Minutes Reveal

Minutes from the Federal Reserve's June policy-setting meeting revealed that most officials anticipate additional interest rate hikes this year due to signs of persistent core inflation in the economy. While rates were held steady at the meeting, policymakers expressed support for raising rates in June and indicated openness to further increases in 2023. The decision to pause the rate hike campaign was made to assess the impact of previous increases on the broader economy. Recent statements from Fed officials, including Chair Jerome Powell, suggest that rate increases are likely to continue. The probability of a rate hike this month stands at over 88%, according to the CME Group's FedWatch tool. Higher interest rates have led to increased borrowing costs for consumers and businesses, with the average rate on 30-year mortgages surpassing 7%. The central bank's staff economists predict a mild recession later this year, but acknowledge the possibility of avoiding a downturn.