The Federal Reserve said Wednesday it is keeping its benchmark lending rates at their current levels for the seventh time in a row, while signaling fewer rate cuts than previously estimated.

That means borrowing costs on everything from car loans to mortgages will remain elevated.

Officials penciled in just one rate cut this year, according to their latest economic projections, compared to the three they forecast in March. They also expect inflation to be more stubborn this year than they thought in the spring, according to their forecasts.

The Fed has kept interest rates at a 23-year high for nearly a year, after kicking off an aggressive rate-hiking campaign in March 2022. Central bankers are waiting for more evidence that inflation is headed toward 2% — and the economy’s resilience is allowing them to be comfortably on hold. The Fed will begin cutting interest rates once it’s clear that inflation has cooled enough and won’t heat back up — or if the job market deteriorates much more than expected, but there are currently not many signs of that.

Hopes for rate cuts got a boost Wednesday morning: Consumer price pressures eased in May on an annual basis. From a year earlier, inflation rose 3.3% in May, down from April’s 3.4% rise and also below expectations.

Fed officials’ latest policy statement noted that inflation has seen some “modest further progress” toward their 2% target in recent months, versus the May statement that noted there had been a “lack” of any improvements.