The U.S. Federal Reserve kept its key interest rate steady for the fifth straight time and continued to signal three rate cuts this year, but indicated that it is not in a rush to ease policy.
The Federal Open Market Committee unanimously decided to hold its key interest rate at 5.25-5.5% in March, citing slowing economic activity and easing but elevated inflation, according to its statement on Wednesday night.
“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” said the FOMC statement. “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”
The central bank had hiked the rates by 25 basis points in July, which took the benchmark rate to its highest in 22 years. In September, November, December and January, it kept them unchanged.
The Fed has maintained their outlook for three quarter-point rate cuts this year, but forecast fewer cuts than before in 2025 following a recent uptick in inflation. The median forecast shows 75 bps of rate cuts in 2024 to 4.6%.
Officials now see just three reductions in 2025, down from four forecast in December, based on the median projection, reported Bloomberg.