03:11 PM EDT, 06/12/2024 (MT Newswires) -- There are signs that inflation is easing, most recently in the May consumer price data released earlier Wednesday, but price growth remains too high and more confidence in that progress is needed before rate cuts can be considered, Federal Reserve Chairman Jerome Powell said Wednesday at a press conference after the FOMC meeting.

The FOMC's statement showed a slightly more optimistic assessment of inflation reduction, saying there has been "modest further progress," but the updated Summary of Economic Projections shows a higher end-of-year reading for PCE inflation than the March estimate.

"We think we've been making progress toward the price stability goal, and then for a while there was a pause and we look at today's (data) and we think, well, that's a good reading and we hope we get more like that, and, you know, in the meantime we're asking, is our policy stance about right, and I think we think yes, it's about right," Powell said. "We're prepared to adjust it as appropriate, but we think we're getting the things that we would want to get broadly speaking, and that's why we've been at this policy right now for almost a year."

Powell repeated that despite improved inflation data, more confidence is still needed before rate cuts are expected but repeated that monetary policy is not on a set course.

"Inflation has eased substantially from a peak of 7% to 2.7% but is still too high," Powell said. "We are strongly committed to returning inflation to our 2% goal in support of a strong economy that benefits everyone."

The Federal Open Market Committee voted Wednesday to leave the range of its federal funds target at 5.25% to 5.5%, but the updated SEP showed only one rate cut is expected in 2024, compared with the three seen in the March SEP. However, the median forecast now shows four rate cuts in 2025, compared with the previously expected three cuts.

Powell said the labor market continues to move into better balance between supply and demand but said FOMC participants still expected a strong labor market ahead. The median forecast in the SEP shows 4% unemployment rate at the end of 2024 and a 4.2% rate at the end of 2025, little changed from the current 4% rate.