The U.S. Federal Reserve held its benchmark lending rate steady for a seventh consecutive time during a monetary policy meeting on Wednesday, as new data showed inflation eased slightly last month to fuel hopes for rate cuts later this year.

After the two-day Federal Open Market Committee (FOMC) meeting, the central bank announced the decision to maintain the rate in the 5.25 to 5.50 percent range, a 23-year high.

Ahead of the decision, the U.S. Labor Department said in a new report that the consumer price index, a key gauge of inflation, rose 3.3 percent on a yearly basis in May — a smaller increase than the 3.4 percent rise in April. The latest reading is slightly below economists’ forecast of 3.4 percent.

Policymakers have been seeking evidence that inflation is on a convincingly sustainable path to its inflation target of 2 percent as they are trying to find the right timing to begin rate cuts.

The U.S. key rate has remained unchanged since a quarter percentage point increase to the current level in
July. Before the freeze, the Fed carried out an aggressive rate-hiking campaign launched in March 2022 to bring down inflation.

Source: Yonhap News Agency