Federal Reserve stands pat on interest rates

The Federal Reserve on Wednesday left its benchmark interest rate unchanged as it awaits more evidence that U.S. inflation is cooling in earnest. 

The central bank kept the federal funds rate — or what banks charge each other for short-term loans — in a range of 5.25% to 5.5%. It has remained at that level, the highest in 23 years, since July of 2023. 

The Fed has been wary of cutting rates due to stubborn inflation, which is showing some signs of easing yet remains above the central bank’s 2% annual target. Earlier on Wednesday, the government said consumer prices in May rose 3.3% on an annual basis, showing some easing from April, when the pace stood a tick higher at 3.4%. 

Inflation-weary consumers are eager to learn when the Fed might start cutting its benchmark interest rate, providing some relief from high borrowing costs. In recent months, Fed Chairman Jerome Powell has stated that the central bank prefers keeping rates elevated until inflation falls closer to its goal because of the risk that cutting too soon could fuel another round of price spikes.  

—This is a developing story and will be updated.