U.S. Federal Reserve Signals A Pause On Interest Rate Hikes This Year

It looks like there won’t be any further interest rate hikes in the U.S. this year.

The Federal Reserve left its key interest rate unchanged on Wednesday and said that it does not project any further interest rate increases during 2019. The Fed announced that it was keeping its benchmark interest rate — which impacts everything from mortgages to credit cards — in a range of 2.25% to 2.5%. It also said it will stop shrinking its bond portfolio in September of this year, a step that should help hold down long-term interest rates.

The announcements by the Federal Reserve signal no major increases in borrowing rates for American consumers and businesses for the rest of this year. Some analysts now believe the next interest rate move in the U.S. could be a cut later this year should the economy slow.

In signaling no rate increases at all this year, the Fed's policymakers reduced their forecast from two rate increases that were predicted last December. The Fed now projects one possible rate hike in 2020 and none in 2021.

The Federal Reserve's decision to halt any further rate hikes this year is in response to slowdowns in the U.S. and global economies. It said in a written statement that while the job market remains strong, "growth of economic activity has slowed from its solid rate in the fourth quarter." The Federal Reserve now forecasts economic growth of just 2.1% this year, down from its previous projection of 2.3% growth.