What to Make of the Fed’s Interest-Rate Pause

The Federal Open Market Committee (FOMC) surprised almost no one Wednesday by “pausing” its streak of interest-rate hikes to give it more time “to assess additional information and its implications for monetary policy.” The Federal Reserve’s rate-setting committee stated clearly that to estimate how much more tightening will be needed, it will take into account “the cumulative tightening of monetary policy” and “the lags with which monetary policy affects economic activity and inflation.”