Federal Reserve Maintains Interest Rates, but Hawkish Dot Plot Suggests Two More Rate Hikes This Year

The Federal Reserve (Fed) announced its latest interest rate decision, maintaining the federal funds rate target range at 5.00-5.25%. Despite the stable rates, the dot plot suggests a more hawkish signal, indicating the possibility of two rate hikes in the future.

Key points from the FOMC statement:

  1. Interest rates remain unchanged, in line with market expectations.
  2. Committee members unanimously agreed on this rate decision to assess further economic data.
  3. Strong job growth and a low unemployment rate were noted.
  4. High attention is given to inflation risks, with a resilient and robust banking system.
  5. The pace of reducing holdings in the U.S. Treasury and mortgage-backed securities (MBS) will remain unchanged.

Key points from Powell’s remarks:

  1. Most policymakers believe that further rate hikes are appropriate, but the pace should be moderate.
  2. Rate cuts are not considered this year, but they would be appropriate if inflation significantly declines.
  3. The labor market’s resilience serves as the engine of the U.S. economy.
  4. Past inflation predictions have been inaccurate, and there has been no significant progress in core PCE over the past six months.
  5. The U.S. economy may experience a soft landing, and a gradually cooling strong labor market could contribute to achieving this goal.


• The Fed maintains unchanged interest rates, but the hawkish dot plot signals the possibility of two future rate hikes.

• The job market’s resilience and inflation risks will be important factors in future policy decisions.

• The U.S. economy may experience a soft landing, necessitating close monitoring of developments in the labor market.