(LEAD) Fed freezes key interest rate for 7th straight time, envisions one rate cut this year

The U.S. Federal Reserve on Wednesday held its benchmark lending rate steady for a seventh consecutive time and envisioned one rate cut later this year as it noted "modest further progress" in its fight against inflation. After the two-day Federal Open Market Committee (FOMC) meeting, the central bank announced the decision to maintain the rate in the 5.25 to 5.50 percent range, a 23-year high. The decision came hours after new government data showed inflation eased slightly last month. FOMC members' latest median economic projections showed that the federal funds rate would be cut to 5.1 percent at the end of this year, down from their March forecast of 4.6 percent. The latest projection signaled one cut this year, two fewer than previously expected. Ahead of the decision, the U.S. Labor Department said in a new report that the consumer price index, a key gauge of inflation, rose 3.3 percent on a yearly basis in May -- a smaller increase than the 3.4 percent rise in April. The latest reading is slightly b elow economists' forecast of 3.4 percent. Policymakers have been seeking evidence that inflation is on a convincingly sustainable path to its inflation target of 2 percent as they are trying to find the right timing to begin rate cuts. The U.S. key rate has remained unchanged since a quarter percentage point increase to the current level in July. Before the freeze, the Fed carried out an aggressive rate-hiking campaign launched in March 2022 to bring down inflation. Source: Yonhap News Agency