US Fed holds key rate steady as Powell says March cut unlikely

WASHINGTON, Feb 01 (AFP): The US Federal Reserve voted Wednesday to leave interest rates unchanged for the fourth straight meeting, while indicating it was moving toward future cuts-but probably not before May at the earliest.

The Fed confirmed in a statement that it was holding its benchmark lending rate steady at its 23-year high, between 5.25 and 5.50 per cent.

The central bank has a dual mandate to keep both inflation and the unemployment rate low, and has been heavily focused at recent meetings on reining in inflation, with an eye on its long-term target of two per cent.

On Wednesday, it said the "risks to achieving its employment and inflation goals are moving into better balance," suggesting a greater emphasis on jobs going forward.

But it added that the rate-setting Federal Open Market Committee (FOMC) is unlikely to start cutting interest rates "until it has gained greater confidence that inflation is moving sustainably" toward two per cent.

"We believe that our policy rate is likely at its peak for this tightening cycle," Fed Chair Jerome Powell told reporters at a press conference after the rate decision.

He added that 'almost everyone' on the 19-person FOMC was in favor of a cut in 2024, but that a move as soon as the next meeting in March was unlikely.