Fed holds rates steady, flagging 'lack of progress' on inflation

Fed chairman Jerome Powell said 'inflation is still too high' adding that 'further progress in bringing it down is not assured'

Federal Reserve chairman Jerome Powell said the Fed's path forward is uncertain. Picture: José Luis Magana/AP

The US Federal Reserve held interest rates steady on Wednesday and signalled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings and suggested a possible stall in the movement towards more balance in the US economy.

Fed chairman Jerome Powell said it was likely to take longer than previously expected for US central bank officials to gain the “greater confidence” needed for them to kick off interest rate cuts.