Federal Reserve Signals Pause in Rate Hikes as Inflation Continues to Cool

WASHINGTON — Federal Reserve Chair Jerome Powell signaled Wednesday that the central bank is likely to pause its campaign of interest rate increases at its next meeting, citing continued progress on inflation and early signs of a softening labor market.

"We have come a long way," Powell said. "Inflation has fallen significantly from its peak, and we are seeing the labor market come into better balance. We can afford to be patient."

The Fed has raised its benchmark interest rate 11 times since March 2022, bringing it from near zero to a range of 5.25 to 5.5 percent. The rate increases have helped bring inflation down from a peak of 9.1 percent to 3.2 percent in the most recent reading.

Financial markets rallied on Powell's comments, with the S&P 500 rising 1.4 percent.