Federal Reserve holds its interest rate steady. Here's what that means.

Federal Reserve officials capped their first monetary policy meeting of 2024 by leaving the central bank's benchmark interest rate unchanged, a decision that was widely expected on Wall Street. But policy makers signaled they expect to cut rates later this year, heightening investor focus on exactly when the Fed might release the brakes on the U.S. economy for the first time in two years. 

Members of the Federal Open Market Committee, the Fed's rate-setting panel, said Wednesday in a policy statement that they will hold the federal funds rate in a range of 5.25% to 5.5%, marking the fourth consecutive pause since July, when it last hiked rates. In December, the central bank forecast three rate hikes this year. 

"The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%," the central bank said in its statement.