Interest rates were kept on hold for the seventh time in a row the Fed. Interest rates remained unchanged in the range of 5.25% to 5.50%, i.e. to a 23-year high for the seventh straight session.

It is a decision that markets have been expecting, as inflation is still far from the 2% target, delaying the easing of monetary policy.

Fed officials estimate that by the end of the year, only one rate cut will follow. In other words, they are now predicting two fewer declines than they thought in March. They also forecast interest rates to be 4.1% by the end of the year, based on the average of their forecasts, an estimate that implies four rate cuts of 25 basis points each.

In March, when the Fed last released its quarterly forecasts, officials expected at least three rate cuts of 25 basis points each in both 2024 and 2025. Those moves would put the rate in a range of 3, 75% – 4% by the end of next year.

But stronger-than-expected inflation has forced the Fed to redefine its policy, slowing rate cuts in the face of an economy that is proving more resilient than expected in the face of high borrowing costs.

However, among US Federal Reserve officials, four believe that US interest rates should not be cut at all this year, while only two held this view three months ago. Also, 7 officials believe that only one rate cut is enough this year, compared to 8 who believe that two are necessary.