WASHINGTON: The US Federal Reserve voted Wednesday to hold interest rates at a 23-year high for a fifth consecutive meeting, while signaling it still expects to make three cuts this year.

The Fed’s decision to keep its key lending rate between 5.25 percent and 5.50 percent lets policymakers “carefully assess incoming data, the evolving outlook and the balance of risks,” the central bank said in a statement.

Last year, the Fed’s policies proved to be a success: inflation eased dramatically from the multi-decade highs seen in 2022 toward the Fed’s long-term two percent target, while the United States was able to avoid a recession thanks to unexpectedly strong economic growth.

But 2024 has been more challenging, with the country seeing a small uptick in the pace of monthly inflation — renewing fears that interest rates will have to remain high for longer to bring prices under control. “Inflation is still too high,” Powell told reporters after the vote, adding: “ongoing progress in bringing it down is not assured, and the path forward is uncertain.”

But despite the recent uptick, Powell said this year’s inflation data “haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward two percent.”

Alongside its rate decision, Fed policymakers also updated their economic forecasts on Wednesday, sharply upgrading the US growth outlook for this year to 2.1 percent, from 1.4 percent in December.