03:12 PM EDT, 03/20/2024 (MT Newswires) -- The Federal Open Market Committee continues to look for signs that inflation is moving "sustainably" toward the 2% goal before considering rate decreases and, while it is likely to happen at some point this year, the Federal Reserve is willing to wait longer if needed, Fed Chair Jerome Powell said Wednesday in a press conference after the panel's meeting.

"We believe that our policy rate is likely at its peak for this time in the cycle and if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year," Powell said. "The economic outlook is uncertain, however, and we remain highly attentive to inflation risks. We are prepared to maintain the current target range for longer if appropriate."

Powell said he is aware of the risks in reducing policy too soon or too much, or alternatively too late or too little, repeating previous comments that the Fed is moving cautiously and meeting-by-meeting.

There were no decisions made at Wednesday's meeting regarding a slowing in the pace of run-off of Fed securities holdings, he said, but it appears the start of the process could be considered at upcoming meetings.

"At this meeting we discussed issues related to slowing the pace of decline in our securities holdings," Powell said. "While we did not make any decisions today on this, the general sense of the committee is that it will be appropriate to slow the pace of run-off fairly soon."

There was no change to the policy rate at this meeting, as expected, putting the focus on changes in the Summary of Economic Projections. Despite adjusting the outlook for gross domestic product growth significantly higher for 2024, core inflation marginally higher and the unemployment rate lower, the median outlook for the federal funds rate remained at 4.6% for the end of the year, still indicating three rate cuts from the current level.

The median federal funds rate for the end of 2025 now suggests three rate cuts next year, compared with four in the December update. The end-of-2026 median was revised higher due to the adjustment in 2025, while the longer-term median was adjusted slightly higher to 2.6% from 2.5%.

There were no significant changes to the FOMC's post-meeting statement, with no mention of when the drawdown in Fed's holding of securities could be slowed. There could be more details on that discussion when the minutes of the meeting are released in three weeks.