Wall Street stocks retreated Wednesday after the Federal Reserve kept interest rates unchanged, but signaled it expects additional increases in 2023.
The US central bank, as expected, opted to hold its benchmark lending rate between 5.0 percent and 5.25 percent. But forecasts from policymakers indicated strong support for two more hikes in 2023.
Near 1835 GMT, the Dow Jones Industrial Average was down 1.1 percent at 33,846.54.
The broad-based S&P 500 dipped 0.4 percent to 4,352.74, while the tech-rich Nasdaq Composite Index lost 0.3 percent at 13,533.64.
Wednesday’s decision broke a streak of 10 straight Fed meetings in which the central bank lifted interest rates in response to elevated inflation.
But recent data have shown a moderation in inflation.
Tuesday’s report showed consumer price inflation jumped 4.0 percent from a year ago in May, less than half of a recent peak level but still well above the Fed’s two percent target.
A note from High Frequency Economics characterized Wednesday’s decision as a “hawkish pause.”
“Net, no surprises on rates at today’s (Fed) meeting,” the note said. “But updated projections signal that no change in policy today does not mean an end of the rate hiking cycle.”
