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The Federal Reserve left interest rates unchanged at its meeting this week but indicated a likelihood of cuts by the end of the year, Reuters reports.

What’s going on: The central bank “held interest rates steady on Wednesday, but policymakers indicated they still expect to reduce them by three-quarters of a percentage point by the end of 2024 despite stodgier expected progress towards the U.S. central bank’s 2% inflation target.”

• The Fed, whose rate decision was widely expected by economists, projected the core personal consumption expenditures index—its preferred inflation gauge—to end 2024 at 2.6%, higher than the 2.4% it forecast previously.
• Still, 10 of the Fed’s 19 officials foresee the interest rate coming down by at least three-quarters of a percentage point by the end of the year.

Why it’s important: “Economic activity has been expanding at a solid pace. Job gains have remained strong, and the unemployment rate has remained low,” officials said in their statement following the meeting.

• However, “[t]he statement also repeated that officials are still seeking ‘greater confidence’ in a continued decline of inflation before they begin cutting interest rates.”