The Federal Reserve hiked its target federal-funds interest rate by a quarter of a percentage point Wednesday, the ninth in a series of hikes that started in March 2022.
The hike brings the Fed’s target rate to a range between 4.75% and 5% with the Fed maintaining its pace of slowed increase. Most economists expected a quarter-point interest-rate hike in an effort to bring inflation down, but the current banking calamities contributed to the possibility of a pause, according to Bloomberg.
As of Wednesday morning, markets were estimating over 90% odds that the Fed would hike rates by a quarter-point, CNBC reported. This brings rates to their highest level since late 2007.
“I think that’s most likely,” Peter St. Onge, research fellow in economics at The Heritage Foundation told the Daily Caller News Foundation. “The trade-off for them is higher rates put more stress on banks.”