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Powell has said Fed officials wanted more time to assess economic data in light of aggressive prior increases as well as credit tightening following bank failures in March.
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U.S. manufacturing slumped further in June, reaching levels last seen when the nation was reeling from the initial wave of the COVID-19 pandemic, but price pressures at the factory gate continued to deflate, a silver lining for the economy.
Financial markets think the Fed is going to skip an interst rate hike at its June meeting and focus its attention on July, but some economists think the central bank will hike rates next week anyway.
Higher borrowing costs are one factor holding back the manufacturing sector. And there's a chance layoffs could be coming.
The Fed says it won't cut interest rates this year even if there's a recession because it wants to stamp out inflation. Markets aren't buying it.