The Federal Reserve on Wednesday held interest rates steady for the sixth straight time as high inflation dimmed the odds of reductions 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.
"Inflatoin has eased over the past year but remains elevated," the Federal Open Market Committee said in its post-meeting statement.
Policymakers raised interest rates sharply in 2022 and 2023, approving 11 rate increases in the hopes of crushing inflation and cooling the economy. In the span of just 16 months, interest rates surged from near zero to above 5%, the fastest pace of tightening since the 1980s.
Hiking interest rates tends to create higher rates on consumer and business loans, which then slows the economy by forcing employers to cut back on spending. Higher rates have helped push the average rate on 30-year mortgages above 8% for the first time in decades. Borrowing costs for everything from home equity lines of credit, auto loans and credit cards have also spiked.
Yet the rapid rise in rates has not stopped consumers from spending or businesses from hiring.
The labor market is continuing to chug along at a healthy pace, with employers adding 303,000 new workers in March. Job openings remain high, and the unemployment rate is hovering around 3.8%.
This is a developing story. Please check back for updates.
