Fed Dials Back Pace of Rate Hikes

Federal Reserve officials dimmed their view of the economy and said they likely won’t raise interest rates as swiftly as they had previously anticipated, a nod to lingering risks posed by soft global growth and financial-market volatility.

Policy makers left short-term interest rates steady and said they expect to raise their benchmark rate just twice this year, after an initial increase in December, down from the four they previously predicted. That moves the Fed more into line with the thinking of investors, many of whom doubted the central bank would be able to move as fast as it had forecast.

Wednesday’s slightly more pessimistic view of the economy and diminished rate outlook reflect the difficulties facing the Fed as economies elsewhere slow and the U.S. itself struggles to gain traction. While inflation is showing signs of stirring, some in the Fed worry that raising rates too soon may choke off the recovery.

Read more: Wall Street Journal.

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