U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, on May 3, 2023. (Xinhua/Liu Jie)
Rates on credit cards, mortgages and auto loans, which have been surging since the Fed began raising rates last year, all stand to rise even more. The result will be more burdensome loan costs for both consumers and businesses.
NEW YORK, May 3 (Xinhua) -- The U.S. Federal Reserve raised interest rates by 25 basis points on Wednesday in the 10th straight move since March 2022 in the fight against rapid inflation, but it also opened the door to a possible pause in rate increases, to which main media responded with various coverage and points of view.
"Fed Raises Rates but Opens Door to Pause," said The New York Times, noting that "central bankers lifted rates to a range of 5 percent to 5.25 percent, a level they have not reached since the summer of 2007. The move capped the fastest series of rate increases since the 1980s, as the central bank led by Chair Jerome H. Powell attempts to slow the economy and weigh down price increases."
"The Federal Reserve raised interest rates by a quarter of a point, its 10th straight increase, as inflation remains stubbornly high. The increase may be its last for now, as policymakers suggest that further moves may not be necessary," it added.
U.S. Federal Reserve Chair Jerome Powell (Rear) attends a press conference in Washington, D.C., the United States, on May 3, 2023. (Xinhua/Liu Jie)
POTENTIAL PAUSE
"Fed increases rates a quarter point and signals a potential end to hikes," said CNBC, noting that "the Federal Reserve approved its 10th interest rate increase in just a little over a year and dropped a tentative hint that the current tightening cycle is at an end. The widely expected decision, which takes the fed funds rate to a target range of 5 percent to 5.25 percent, was unanimous."
"Fed raises key rate but hints it may pause amid bank turmoil," said The Associated Press. "Chair Jerome Powell said the Fed has yet to decide whether to suspend its rate hikes. But he pointed to the change in the statement's language as confirming at least that possibility. Powell said the Fed would continue to monitor the latest economic data in deciding whether to pause its hikes."
"Fed delivers small rate hike, signals possible pause in tightening cycle," reported Reuters, emphasizing that "the Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point and signaled it may pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation."
"Fed raises rates by 0.25 percentage points, but this hike may be last for now," commented The Washington Post, noticing that "the Federal Reserve on Wednesday raised interest rates for the 10th time in just over a year -- but backed away from previous statements that suggested future increases."
"Fed Raises Rates by Quarter Point, Signals Potential Pause," said The Wall Street Journal, stressing the basic information that "the decision marked the Fed's tenth consecutive rate increase aimed at battling inflation and will bring its benchmark federal-funds rate to a range between 5 percent and 5.25 percent, a 16-year high."
USA Today agreed to the hint of potential pause, saying in its report that "the central bank stopped short of stating that rates are probably high enough to lower annual inflation to the Fed's 2 percent target, as some economists anticipated. That likely would have been a more emphatic preference for a pause."
"Fed raises interest rates, hints possible end to series of hikes," said Axios, adding that "it is leaving the door open to another increase at its next policy meeting in June should, for example, the economy pick up momentum or inflation prove more persistent than expected. If that's not the case, officials could choose to pause its rate hiking cycle."
U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, on May 3, 2023. (Xinhua/Liu Jie)
HIGHER COSTS
"Federal Reserve pushes interest rates above 5 percent for first time since 2007," said Yahoo Finance, noting that "the central bank's move pushed its benchmark policy rate, the fed funds rate, to a new range of 5 percent to 5.25 percent, the highest since September 2007. The Fed said future rate hikes would be contingent on the impact of previous rate hikes on the economy and financial developments."
"The Fed lifts rates by a quarter point," reported CNN concisely with such a title, noting that "the move comes amid ongoing fragility in the banking sector triggered partly by higher interest rates, and following the collapse of three regional banks. Markets had anticipated the rate hike, and remained fairly muted after the Fed's announcement."
"Federal Reserve raises interest rates to 16-year high as fight to tame inflation persists," said NBC News, adding that "while inflation remained elevated, higher borrowing costs for households and businesses are likely to weigh on economic activity, hiring and inflation," and "the extent of these effects remains uncertain."
"From your credit card to your car to your job, the Fed's next interest rate hike is going to hit your wallet," Fortune reported. "Rates on credit cards, mortgages and auto loans, which have been surging since the Fed began raising rates last year, all stand to rise even more. The result will be more burdensome loan costs for both consumers and businesses."
"On the other hand, many banks are now offering higher rates on savings accounts, giving savers the opportunity to earn more interest," it added. "Economists worry, though, about whether the Fed's streak of 10 rate hikes since March 2022 will eventually cause the economy to slow too much and cause a recession."
"The Fed Raises US Rates by a Quarter Point, Signaling Possible Pause," said Bloomberg, noting that "policymakers are resolved to ensure inflation will continue decelerating - potentially with costs to employment - even as the banking system endures ongoing stress, lawmakers step up criticism and the latest data suggest emerging weakness in the labor market."
"The Federal Reserve just raised interest rates again - its fastest stream of hikes in 40 years. 2 important money moves to make now," alerted MarketWatch, quoting Bankrate chief financial analyst Greg McBride as saying that "this could be the last (rate hike), or the last for a while," and that is only "if the Fed chooses to sit back and evaluate inflation, the state of the economy, and the cumulative impact of all the rate hikes." ■
