Fed announces March rate decision

In its accompanying statement, the Fed noted that inflation had eased over the past year, “but remains elevated” while economic activity has also expanded at a solid pace and job gains have continued strongly.

“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%,” it added.

Markets have pushed back their timeline for rates to start falling, with the fed funds futures market having anticipated a March cut at the beginning of the year but now expecting rate drops by June at the earliest.

Expectations have also risen that the Fed will introduce a milder series of cuts than first envisaged, with markets adjusting predictions from six or seven drops to three this year.

First American deputy chief economist Odeta Kushi indicated prior to the announcement that stickier-than-expected inflation had likely kept the Fed on a more cautious path than it might otherwise have taken.