The Federal Reserve held interest rates at a 23-year high Wednesday while scaling back its estimate of rate cuts this year to one from three previously.
The central bank voted to keep its benchmark interest rate in a range of 5.25%-5.50% at the conclusion of its two-day policy meeting. The fed funds rate has been in this range since July 2023.
It was a close call on the revised median of rate cuts predicted for this year. Eight officials estimated two cuts this year, while seven officials predicted one cut. Four officials saw no cuts happening this year.
At the same time Fed officials boosted their collective forecast for the number of cuts expected next year. They now see a median of 4 additional rate cuts happening in 2025. That is up from a prior forecast of 3.
Fed officials on Wednesday also raised their 2024 outlook for inflation, seeing prices end the year at 2.8% from 2.6% previously as measured by their preferred inflation measure — the "core" Personal Price Expenditures (PCE) index.