The US Federal Reserve, commonly called the Fed, on Wednesday voted to leave interest rates unchanged for the fourth time running. The Fed will hold its benchmark lending rate between 5.25% and 5.50%, a 23-year high.

Fed Chairman Jerome Powell on Wednesday said the rate was "likely at its peak" for this tightening cycle. 

"If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year," said Powell at a press conference. However, Powell added that a near-term rate cut in March was unlikely.

In a statement, the Fed said it was unlikely to cut interest rates until it, "has gained greater confidence that inflation is moving sustainably toward two percent."

Fed eyes 'soft landing'

The Fed is charged with fighting both inflation and unemployment and is focused on bringing inflation, currently at 3.4%, down to a long-term target of 2.0%. 

"Inflation has eased over the past year, but remains elevated," read a Fed statement noting that officials "remain highly attentive to inflation risks."

A key barometer used by the Fed suggests it is on the right path — with annual inflation below 3% when excluding food and energy prices. 

Economic growth has remained strong at 2.5% (2023) and unemployment has remained at nearly historic lows. Cooling private hiring also suggests the Fed's actions are having the desired effect.

js/wmr (AP, dpa)