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

The Federal Reserve left its benchmark interest rate unchanged at 4.25%-4.50% after its September Federal Open Market Committee meeting, signaling that policymakers remain cautious as inflation continues to run above the central bank’s 2% target.

In its latest decision, the Fed said it needs more convincing evidence that price pressures are easing before considering rate cuts. Chair Jerome Powell reinforced that message, indicating that easing policy is not imminent and that officials want to see sustained progress on inflation before shifting course.

The decision was closely watched by investors, who have been looking for signs of when the Fed may begin lowering borrowing costs. Markets reacted modestly to the announcement. The S&P 500 slipped 0.3%, while the U.S. dollar strengthened 0.5% against major currencies as traders adjusted expectations for the timing of future cuts.

Risk assets showed limited movement in the wake of the announcement. Bitcoin held near $63,000, reflecting a cautious broader market mood as investors weighed the prospect of higher-for-longer interest rates.

The Fed’s latest stance underscores its focus on restoring price stability, even as it continues to monitor growth, labor market conditions and inflation data for signs that policy can eventually turn more accommodative.