The Federal Reserve emphasized that inflation has remained stubbornly high and said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target. The Fed kept its key rate at a two-decade high of roughly 5.3%. Several hotter-than-expected reports have recently undercut the Fed’s belief that inflation was steadily easing. The combination of high rates and persistent inflation has also emerged as a potential threat to President Joe Biden’s re-election bid. “In recent months,” Chair Jerome Powell said, “inflation has shown a lack of further progress toward our 2% objective," adding, "It is likely that gaining greater confidence will take longer than previously expected.”

U.S. stocks finished mixed after the head of the Federal Reserve said the cuts to interest rates that Wall Street craves so much are still likely, even if they’re delayed because of stubbornly high inflation. The S&P 500 fell 0.3% Wednesday after seeing a big afternoon rally evaporate. The Dow Jones Industrial Average rose 0.2%, and the Nasdaq composite lost 0.3%. On the downside for financial markets, the Fed’s chair said inflation is taking longer than expected to get under control. But he also said its next move is unlikely to be a rate hike and announced moves to help stabilize the bond market.