Fed holds rates steady as inflation casts doubt on future cuts

The Federal Reserve on Wednesday held interest rates steady for the sixth straight time after a string of disappointing inflation readings dimmed the odds of cuts later this year. The widely expected decision – which left interest rates unchanged at a range of 5.25% to 5.5%, the highest level in 23 years – comes amid signs that progress on inflation is stalling, or even starting to reverse.

While inflation has fallen considerably from its peak, progress has largely flatlined since the summer. The Fed's favorite gauge shows that inflation is running at a 2.7% pace – well above the central bank's 2% goal. When excluding food and energy, underlying core inflation came in even hotter at 2.8%. "In particular, readings on inflation have come in above expectations," Chair Jerome Powell told reporters at a press conference in Washington.

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Federal Reserve says it doesn't plan to cut interest rates until inflation further coolsU.S. stocks are drifting Wednesday as Wall Street waits to hear from the Federal Reserve about where interest rates may be heading.
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