Federal Reserve Signals End of Interest Rate Hikes, Markets Rally to Record Highs

The Federal Reserve has signaled that its aggressive interest rate hiking cycle may be coming to an end, as inflation data shows consistent cooling trends. Fed Chair Jerome Powell indicated that while the fight against inflation isn't over, the central bank may pause rate increases to assess the cumulative impact of previous hikes. The announcement sent markets surging, with the S&P 500 reaching new all-time highs and bond yields falling. Investors interpreted the shift as a sign that the economy may achieve a soft landing, avoiding a severe recession while successfully taming inflation. The decision reflects careful balancing between maintaining price stability and supporting economic growth. Analysts predict that if inflation continues to moderate, the Fed may begin cutting rates in the second half of the year, providing further support to markets and the economy.