US Federal Reserve holds interest rates steady | NHK WORLD-JAPAN News

Policymakers at the US Federal Reserve say inflation has fallen toward their target level but decided to hold the benchmark interest rate steady. They suggested they would cut the rate just once this year.

The Fed made the announcement following the close of its two-day policy meeting on Wednesday.

Central bankers had raised interest rates to discourage consumers and businesses from borrowing after inflation hit heights not seen in decades.

The benchmark interest rate has been in the 5.25-5.50 percentage range since last July.

Although inflation has dropped to less than half the level of its peak, officials say further improvement is needed.

Fed Chair Jerome Powell said, “We don’t think it’d be appropriate to reduce rates and begin to loosen policy until we have more confidence that inflation is moving back down to 2 percent on a sustainable basis.”

Their new projections show the federal funds rate would be at 5.1 percent at the end of the year. That signals only a single quarter-percentage-point reduction for the year, which is down two from the previous forecast in March.