US holds interest rates steady in first since 2022

The US Federal Reserve has announced it will hold interest rates steady - the first time it has opted against a rise in more than a year.

The Federal Reserve kept the target for its benchmark rate at 5%-5.25% saying it wanted time to assess the impact of rate hikes so far.

The bank has already raised rates 10 times since March 2022 as it battles to bring inflation under control. 

Bank forecasts show most officials expect rates to rise further. 

A majority expect the Fed's key rate to stand above 5.5% at the end of the year and one person sees it climbing above 6%.

Federal Reserve chairman Jerome Powell said the bank was still waiting for evidence that inflation was slowing "decisively" - though it has come down sharply from its peak last year, as the shock to food and energy prices from the war in Ukraine subsides.

"We're just not seeing a lot of progress," he said. "We're going to have to keep at it."

Consumer prices rose 4% in the 12 months to May, climbing just 0.1% from a month earlier, the Labor Department reported on Tuesday. 

But that remains higher than the 2% rate the bank considers healthy. Prices for many items beyond food and energy continue to rise steadily.

The Fed has already lifted its benchmark rate to the highest levels since 2007 to try to rein in the increases.

Further rises, after a pause, would follow a path carved out by central banks in countries such as Australia and Canada, which recently announced rate hikes following a break, citing stubborn inflation pressures. The European Central Bank is expected to raise rates at its meeting this week. (CNN)