The Fed no longer thinks a recession will happen this year

• Fed Chair Jerome Powell said the central bank no longer forecasts a recession this year.
• It's a shift from previous meetings when the committee left the potential for a recession on the table.

Federal Reserve Chair Jerome Powell confirmed the central bank no longer believes a recession will happen this year.

On Wednesday, the Fed announced it was raising interest rates by 25 basis points after it held rates steady in June. It's the bank's latest move to get inflation down to its 2% target, and while the latest inflation data shows prices are cooling, Powell said during the press conference that additional hikes will be warranted to continue battling inflation.

"We've come a long way," Powell said. "We are resolutely committed to returning inflation to our 2% goal over time. Inflation repeatedly has proved stronger than we and other forecasters have expected and at some point that may change. We have to be ready to follow the data. And given how far we've come, we can afford to be a little patient as well as resolute as we let this unfold."

However, he punted recession concerns by saying that the Fed staff no longer forecasts a recession in 2023. This differs from previous Federal Open Market Committee meetings, during which the staff did leave a recession on the table.

Powell's comments are another sign that the country can achieve a soft landing, in which the Fed can continue fighting inflation while avoiding a severe economic downturn. It's something Powell and other administration officials like Treasury Secretary Janet Yellen have said is possible — Yellen said during a Bloomberg TV interview last week that "growth has slowed, but our labor market continues to be quite strong. I don't expect a recession. The most recent inflation data were quite encouraging."

As for further rate hikes this year, Powell did not offer any hint as to where the committee might lean. The next FOMC meeting is in September, and Powell said the bank will evaluate upcoming jobs and inflation data to determine the best next course of action.

"We haven't made any decisions about about any future meetings, including the pace at which we'd consider hiking," he said. "But we're going to be assessing the need for further tightening that may be appropriate."