Fed holds rates at 4.25%-4.50% as Powell signals no cuts until inflation cools further

The Federal Reserve kept its benchmark interest rate unchanged at 4.25% to 4.50% after its latest policy meeting, reinforcing its cautious stance as inflation remains above the central bank’s 2% target. The decision leaves borrowing costs steady for consumers and businesses, while signaling that policymakers want more evidence that price pressures are easing before considering any rate cuts.

In remarks following the meeting, Fed Chair Jerome Powell said the central bank is not prepared to lower rates until it sees clearer and more sustained progress on inflation. His comments suggested that market expectations for near-term monetary easing may be premature, especially as officials continue to weigh the balance between slowing inflation and supporting economic growth.

The announcement had an immediate effect on financial markets. US stock futures edged lower in after-hours trading, while the dollar strengthened modestly against major currencies. Investors have been closely watching the Fed for clues on the timing of future policy moves, with the latest decision underscoring that interest rates may remain elevated for some time.

The Fed’s latest hold reflects a continued focus on restoring price stability, even as policymakers monitor broader economic conditions and the potential impact of tighter financial conditions on growth.