The Federal Reserve (Fed) is hesitant to raise interest rates due to concerns about inflation and the economy’s growth.

The Fed raises rates to discourage investment and household consumption, but closing the door on further rate hikes could soften financial conditions.

The Fed’s next meeting may involve a communications shift as it manages the end of its rate increases and transition to reducing interest rates next year.

The Fed’s response to inflation may be skewed, as recent data suggests rates may remain higher than expected through 2024, despite ongoing disinflation.