The Federal Reserve on Wednesday held interest rates steady for the seventh straight time and scaled back the outlook for rate reductions later this year as high inflation lingers.

New quarterly economic projections laid out after the meeting show that a majority of Fed officials who participated expect rates to fall to just 5.1% by the end of 2024, suggesting there will only be one quarter-point rate cut this year – a sharp reversal from the three they had predicted in March. 

In their post-meeting statement, policymakers left the door open to rate cuts but stressed they need "greater confidence" inflation is coming down before lowering borrowing costs. 

While inflation has fallen considerably from its peak, price pressures have proven more stubborn than expected. The Fed's favorite gauge shows that inflation is running at a 2.7% pace — well above the central bank's 2% goal. When excluding food and energy, underlying core inflation came in even hotter at 2.8%.