The Federal Open Market Committee left the federal funds target range unchanged at 5.25% to 5.50%, as widely expected, following its two-day meeting.

Officials still aim to cut interest rates by three-quarters of a percentage point by the end of the year, keeping to an earlier projection despite recent mixed economic data, notably higher inflation readings in the last two months. However, the Committee expects fewer rate cuts in 2025 than it previously projected.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” the FOMC statement read.

In the central bank’s most recent Summary of Economic Projections, policymakers predicted that the benchmark federal funds rate would fall to a median of 4.60% by the end of the year.

Policymakers predict that core personal consumption expenditures, excluding volatile food and energy expenses, will finish the year at 2.6%. This is more than the 2.4% they predicted in December. Longer-term inflation expectations were also moved upward; they are now forecast to range between 2.5% and 2.8%, up slightly from 2.4% to 2.7%.

The projected unemployment rate for the year ahead was revised slightly lower to 4% from 4.1%.

This is the fifth consecutive meeting that the central bank has kept monetary policy steady, following 11 hikes that began in March 2022.