US Federal Reserve Raises Interest Rates for the 10th Time in 14 Months to Tackle Inflation

The US Federal Reserve has raised interest rates for the 10th time in 14 months to tackle inflation, bringing the benchmark rate to between 5% and 5.25%.^[0] The Fed is considering additional hikes to bring inflation down to its goal of 2%.^[1] While inflation has dropped from last summer’s high of 9.1%, it remains above the target rate, and policymakers fear it could become a permanent threat to workers and families.^[2] However, the cost of groceries fell 0.2% in April, and there are signs that the rate of price increases for used cars and trucks may be temporary.^[3] The Fed has removed an indication from its previous policy statement that future interest rate increases are warranted, instead basing decisions on incoming data.^[4] The probability of the federal funds rate target range remaining at 5%-5.25% at the June meeting has increased to 89.2% from 78.8%.^[5]

0. “Inflation eased in April, even as bank crisis slows economy, CPI figures show” The Washington Post, 10 May. 2023, https://www.washingtonpost.com/business/2023/05/10/inflation-april-cpi-fed/

1. “Prices inched down in April as yearly inflation drops to 4.9%” MLive.com, 10 May. 2023, https://www.mlive.com/public-interest/2023/05/prices-inched-down-in-april-as-yearly-inflation-drops-to-49.html

2. “CPI: Inflation rate falls below 5% for first time since June 2021” CBS News, 10 May. 2023, https://www.cbsnews.com/news/consumer-inflation-cpi-april-4-9/

3. “Inflation jumped 0.4% in April as prices remain stubbornly high” Fox Business, 10 May. 2023, https://www.foxbusiness.com/economy/cpi-inflation-april-2023

4. “Price hikes cooled slightly in April, continuing monthslong slowdown” ABC News, 10 May. 2023, https://abcnews.go.com/Business/fresh-inflation-data-show-cooling-continued-april/story?id=99194165

5. “CPI rises 0.4% in April, as expected; core CPI holds at 0.4% M/M” Seeking Alpha, 10 May. 2023, https://seekingalpha.com/news/3969040-cpi-rises-04-in-april-as-expected-core-cpi-holds-at-04-mm