Fed holds rates at 4.25%-4.50%, 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, maintaining a cautious stance as inflation remains above the central bank’s 2% target. The decision reflects policymakers’ view that price pressures have not eased enough to justify an immediate shift toward lower borrowing costs.

In remarks following the announcement, Fed Chair Jerome Powell said rate cuts are unlikely until officials see clearer and more sustained progress on inflation. He stressed that the central bank wants stronger evidence that disinflation is durable before considering any easing cycle. The message signaled that the Fed remains focused on restoring price stability, even as some investors had hoped for earlier relief.

Markets reacted modestly to the decision. US stock futures edged lower, while the dollar strengthened against major currencies as traders adjusted expectations for the timing of future cuts. The Fed’s latest move underscores its commitment to keeping policy restrictive for as long as necessary to bring inflation back under control.