The Fed holds interest rates steady. Here's when a rate cut could happen.

Although the Federal Reserve on Wednesday left its benchmark interest rate unchanged, as widely expected, Chair Jerome Powell said the "time is drawing near" for the central bank to begin trimming borrowing costs. That could occur as soon as the Fed's next policy meeting in September, assuming economic data continues to show cooling inflation, he added.

Members of the Federal Open Market Committee, the central bank's rate-setting panel, said in a policy statement on Wednesday they will hold the federal funds rate in a range of 5.25% to 5.5%, leaving it at its highest level in 23 years. 

The Fed's announcement, which was widely expected by investors, means the federal funds rate has been parked at that level since July 2023, when the central bank last raised rates.