The Fed keeps interest rates at a 23-year high for the sixth-straight meeting

The Federal Reserve kept interest rates at their current levels Wednesday, as hotter-than-expected inflation data continues to push back the timing of the first rate cut.

The Federal Reserve said Wednesday it is holding interest rates at their current levels, as hotter-than-expected inflation data continues to push back the timing of the first rate cut. Fed officials have kept their benchmark lending rate at a 23-year high since July, after aggressively raising rates starting two years ago. Officials have said they need to have enough confidence that inflation is under control before lowering borrowing costs, but the latest figures show “there has been a lack of further progress,” according to their latest policy statement. The US economy also remains in good shape, which means the Fed doesn’t need to be in any rush to cut rates. Markets surged Wednesday afternoon after Federal Reserve Chair Jerome Powell indicated twice during a press conference that policymakers believed interest rate policy was already “restrictive” enough and that it was “unlikely” that they they would raise rates again in this cycle. Consumer prices remained stubbornly elevated in the first three months of the year, largely due to persistent price pressures in housing and the broader services sector. An upswing in gas prices over the past several weeks has also pushed up inflation overall. Not only did inflation’s progress stall in the first quarter, but wage growth also picked up steam, according to the latest Employment Cost Index released Tuesday. The latest economic data doesn’t bode well for lower interest rates in the next few months. Chair Powell has recently said that the first rate cut is likely this year, but he could easily change his view if the figures continue to disappoint. The Fed chief has also said that a “rebalancing” of the job market is helping bring inflation lower, but the latest ECI data undermines that perspective. The job market overall remains robust, with unemployment still under 4% and employers continuing to hire workers at a brisk pace. The Labor Department releases April figures on hiring, wage gains and unemployment on Friday.