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

The Federal Reserve left its benchmark interest rate unchanged at 4.25%-4.50% after its latest Federal Open Market Committee 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 additional evidence that inflation is easing before considering any rate cuts. Chair Jerome Powell reinforced that message, indicating that policy easing is not imminent and that officials want to see clearer, more durable disinflation before changing course.

Markets reacted cautiously to the decision. The S&P 500 fell 0.5% as investors scaled back expectations for near-term monetary easing, while the U.S. dollar rose 0.3% against major currencies. Risk assets also came under pressure in the digital-asset market, with Bitcoin dropping 2% as traders adjusted to the prospect of higher rates for longer.

The decision underscores the Fed’s continued focus on inflation control, even as policymakers balance the risk of keeping rates restrictive for too long. For now, the central bank is signaling patience, with any future cuts likely to depend on a clearer and more sustained cooling in inflation data.