The Federal Reserve on Wednesday is expected to take a break and let the U.S. economy catch its breath.
Communication from the Fed, then, likely will be, "We're not convinced that this is the end of the rate hikes, but we want to take a look around see what kind of damage the banking crisis has inflicted on the economy," said Mark Zandi, chief economist at Moody's Analytics. "It also recognizes that there's a lag between what we do and when it shows up in the economy and inflation. So we're just going to pause here.
"The press conference is likely to emphasize that just because we did not hike at a given meeting, that does not mean that we're done hiking," said Dean Maki, head economist at Point72. "He will be very explicit about that. At the same time, I don't think he wants to pre-commit to a July hike." History suggests that central banks that pause usually commence hiking soon after they discover that inflation hasn't been vanquished, according to Goldman Sachs.
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