The Federal Reserve has decided to keep interest rates unchanged, signaling expectations for one more hike later this year and fewer cuts in the following year. This potential final increase would mark a total of twelve hikes since the tightening of policy began in March 2022. While the decision to hold rates steady was anticipated, uncertainty looms over the Fed’s future actions, with indications of a more restrictive policy and a higher-for-longer approach to interest rates. This outlook has weighed on the market, causing a nearly 1% drop in the S&P 500 and a 1.5% decline in the Nasdaq Composite. Fed Chair Jerome Powell expressed caution, emphasizing the need for more progress in addressing inflation. The Fed’s projections suggest one more hike this year, followed by two cuts in 2024, a decrease from previous estimates. The decision comes as the Fed grapples with balancing inflation control and economic growth. Meanwhile, the Bank of England paused its 14 consecutive interest rate hikes as inflation in the UK fell below expectations, emphasizing the complexity of managing monetary policy in the current economic climate.