Federal Reserve poised to leave rates unchanged as it tracks progress

Since Federal Reserve officials last met in July, the economy has moved in the direction they hoped to see: Inflation continues to ease, if more slowly than most Americans would like, while growth remains solid and the job market cools.

When they meet again this week, the policymakers are likely to decide they can afford to wait and see if the progress continues. As a result, they’re almost sure to leave their key interest rate unchanged when their meeting ends Wednesday.

The cooling of inflation suggests that the Fed is edging toward a peak in the series of rate hikes it unleashed in March of last year — the fastest such pace in four decades, one that has made borrowing much costlier for consumers and businesses.

The focus for Wall Street investors and analysts now is shifting toward what comes next. Some clues could come in the updated interest rate projections it releases each quarter and at a news conference with Chair Jerome Powell.

Another rate hike this year will likely remain on the table, and Fed officials may project fewer cuts in their key rate next year than they did in June. This would underscore the Fed’s determination to keep rates elevated well into next year as it strives to get inflation down to its 2% target.