On Wednesday, the Federal Reserve announced in a statement that was keeping its key interest rates steady, stating that it projects just one interest rate cut is possible before year’s end. The central bank said economic activity “has continued to expand at a solid pace,” while job gains “have remained strong, and the unemployment rate has remained low.”

The central bank kept the federal funds rate in a range of 5.25% to 5.5%; it has remained at that level, the highest in 23 years, since July of 2023. Though inflation has eased over the past year, it remains elevated — even as there has been “modest further progress toward the Committee’s 2% inflation objective.”

Fed Chairman Jerome Powell told reporters that the Consumer Price Index report released earlier Wednesday is encouraging, but noted that the central bank wants to see more evidence in coming months that inflation is on a path to return to about 2% before moving to cut the benchmark rate. Powell said that inflation has eased from a high of 7% to 2.7%, but is “still too high,” adding: “we see today’s report as progress and building confidence, but we don’t see ourselves as having the confidence that would warrant beginning to loosen policy at this time. My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. Our economy has made considerable progress toward both goals.” Powell said the Fed’s “restrictive stance on monetary policy” is to “keep demand in line with supply and reduce inflationary pressures,” and that economic activity has continued to “expand at a solid pace,” while growth of consumer spending has slowed from “last year’s robust pace but remains solid .. Committee participants generally expect GDP growth to slow from last year’s pace with a median projection of 2.1% this year and 2.0% over the next two year.”

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