Fed keeps rates at 4.25%-4.50%, says cuts await clearer inflation progress

The US Federal Reserve left its benchmark interest rate unchanged at 4.25%-4.50% after its latest policy meeting, signaling that borrowing costs are likely to stay elevated until inflation shows more sustained progress toward the central bank’s 2% target.

In its statement, the Fed pointed to persistent price pressures and said it needs stronger evidence that inflation is easing before considering rate cuts. Chair Jerome Powell reinforced that message, indicating that easing policy is not imminent and that officials want to see clearer, longer-lasting disinflation before shifting course.

The decision was broadly in line with market expectations, but it tempered hopes for near-term monetary easing. Investors had been looking for signs that the central bank could begin lowering rates later this year, yet the Fed’s cautious tone suggested policymakers remain focused on keeping inflation in check.

Financial markets reacted modestly to the announcement. US stock futures edged lower, while the dollar strengthened against major currencies as traders adjusted expectations for the timing of any future rate cuts. The Fed’s stance underscores its continued balancing act between supporting economic growth and ensuring inflation returns to target.