The Federal Reserve in the United States maintains interest rates unchanged, hinting at possible further hikes later this year.

The Federal Reserve of the United States announced its interest rate decision for June, maintaining the target range for the federal funds rate at 5.00% to 5.25%. The decision to pause the interest rate hike this time allows the committee to assess additional information and wait for the impact of previous rate hikes to further permeate the economy, while hinting that there may be further rate hikes later this year.

This is just a pause, more rate hikes expected later this year

Since March 2022, the Federal Reserve in the United States has raised the federal funds rate 10 times in a row, trying to cool down the U.S. economy and combat the still-targeted double-digit inflation. Although the decision to pause the rate hike was unanimous, officials see this as a cautious move, acknowledging the lag in rate decisions and the need to allow the impacts of previous hikes to fully permeate the economy.

According to the recently released dot plot, most officials believe that further rate hikes are still necessary this year, with the federal funds rate expected to reach its peak at 5.63-5.87% in 2023, compared to the March figure of 5.1%.

Fed Chair Powell stated in the post-meeting press conference:

Looking ahead, almost all Committee members think it may be appropriate to raise rates further this year to bring inflation down to 2% over time.

However, according to the latest FedWatch statistics from the CME Group, the market generally sees a higher probability of another rate hike this year. Recent data releases have also alleviated concerns about a looming economic recession, as both the Fed's dot plot and FedWatch indicate that a rate cut may not be on the table until 2024.

Market Performance Yesterday

Yesterday, the market saw widespread declines, with the S&P 500 barely holding above flat levels, while the Dow Jones Industrial Average plummeted by 232 points, a decrease of 0.68%. Cryptocurrencies also continued their downward trend, with BTC down by 3.02% and ETH by 4.99% as of 8:00 AM today.