Fed keeps rates unchanged but signals likelihood of another hike this year to fight inflation

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — The Federal Reserve left its key interest rate unchanged for the second time in its past three meetings, a sign that it’s moderating its fight against inflation as price pressures have eased. But Fed officials also signaled that they expect to raise rates once more this year. Consumer inflation has dropped from a year-over-year peak of 9.1% in June 2022 to 3.7%. Yet it’s still well above the Fed’s 2% target, and its policymakers made clear that they aren’t close to declaring victory over the worst bout of inflation in 40 years. The Fed’s latest decision left its benchmark rate at about 5.4%, the result of 11 rate hikes it unleashed beginning in March 2022.