They have remained at that level, the highest in 23 years, since July 2023.

Fed officials are anticipating a higher inflation rate this year, 2.6% compared to the 2.4% prediction they made in March.

US central bankers believe inflation will fall to 2.3% by the end of 2025 and reach the Fed's 2% target in 2026.

The Fed late last year predicted it might cut interest rates three times this year, but with the announcement on Wednesday, the agency will lower the federal funds rate only a quarter of a percentage point by year’s end.