Fed holds key rate steady, gives no hint on start of cuts

Concerns about inflation risks remain, but target rate likely at peak’ of tightening cycle

WASHINGTON - The United States Federal Reserve left interest rates unchanged on Jan 31 but took a major step towards lowering them in the coming months in a policy statement that tempered inflation concerns with other risks to the economy and dropped a longstanding reference to possible further hikes in borrowing costs.

The US central bank's latest policy statement gave no hint that a rate cut was imminent, and indeed said the policy-setting Federal

Open Market Committee (FOMC) does not expect it will be appropriate to "reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2 per cent", the Fed's inflation target.

"Inflation has eased over the past year, but remains elevated," the Fed said in the statement after a two-day meeting, restating that officials "remain highly attentive to inflation risks".

Speaking after the FOMC meeting in a press conference, Fed chairman Jerome Powell cautioned that the Fed's struggle to lower inflation is not over.

"We are not declaring victory, we think we still have a way to go," he said.