Economics

The Federal Reserve pushed the pause button on its interest rate cuts Wednesday, leaving its key rate unchanged at about 3.6% after lowering it three times last year.

Chair Jerome Powell said at a news conference after the central bank announced its decision that the economy’s outlook “has clearly improved since the last meeting” in December, a development that he noted should boost hiring over time. The Fed also said in a statement that there were signs the job market is stabilizing.

With the economy growing at a healthy pace and the unemployment rate appearing to level off, Fed officials likely see little reason to rush any further rate cuts. While most policymakers do expect to reduce borrowing costs further this year, many want to see evidence that stubbornly-elevated inflation is moving closer to the central bank’s target of 2%. According to the Fed’s preferred measure, inflation was 2.8% in November, slightly higher than a year ago.