The US Federal Reserve concluded its June meeting of the Federal Open Market Committee on Wednesday, and its officials have announced a pause in interest-rate hikes, leaving rates at 5% to 5.25%.

The Fed chair Jerome Powell signalled that borrowing costs may still need to rise by as much as half of a percentage point by the end of this year, as the U.S. central bank reacted to a stronger-than-expected economy and a slower decline in inflation.

This is the first pause in the consecutive streak of 10 rate hikes, with the tightening cycle starting in March 2022. During this period, the central bank’s policy rate rose 5 percentage points, reaching the highest level just before the 2007-2009 recession started. The hike decisions are a response of the Fed to the worst outbreak of inflation in 40 years, 9.1% in June last year.

In a press conference at the end of the central bank’s latest policy meeting, Powell described U.S. growth and the job market as holding up better than expected under the weight of the aggressive monetary policy tightening of the past year. Under the Fed’s latest quarterly projections, growth and inflation estimates increased slightly while unemployment estimates decreased. 

The data suggests that “more restraint will be necessary,” officials see the benchmark interest rate moving up another half of a percentage point beyond the current 5.00%-5.25% range. The July 25-26 “live meeting” could bring another increase.