However, officials reduced their expected number of rate cuts for next year from four to two.

Fed Chair Powell says rates will fall, but 'over time,' adding that the FOMC "is not a committee that feels like it's in a hurry to cut rates quickly."

"There's a strong argument for a half percent" interest rate cut when the Federal Reserve meets in mid-September. "It's going to be hotly debated."

"Now that inflation has come down and the labor market has indeed cooled off, we're going to be looking at both mandates. They're in much better balance."