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Published: Jun 14, 2023 6 min read

After more than a year of hiking interest rates, the Federal Reserve has hit pause on increases for now.

On Wednesday, the Federal Open Market Committee — the Fed branch that determines the direction of monetary policy — left the fed funds rate at a target range of between 5% and 5.25%. That comes after 10 consecutive interest rate hikes, which the central bank has been implementing in an effort to bring down inflation.

The break from interest rate hikes had been widely expected, coming on the heels of the latest report on consumer prices showing that inflation rose at an annual rate of 4% in May — the lowest annual rate in about two years.

But that doesn't mean we won't be seeing more interest rate increases this year. In fact, the policymakers pushed their median rate forecast up to 5.6%, which suggests they may expect two more rate hikes by the end of 2023. During a press conference on Wednesday, chair of the Fed Jerome Powell reiterated that nearly all committee participants expect it will be "appropriate" to raise interest rates somewhat further by the end of the year.

What does a pause in rate hikes mean for your money? Here's what you should know.