The odds of a March interest rate cut have ebbed significantly, as Fed officials push back against market expectations for imminent and deep reductions this year.

As inflation heads to the 2% target, the Fed held rates steady for the third straight meeting, and officials predicted a series of cuts next year.

Chair Jerome Powell said this week: "Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go."

"Central banks have become a source of macro volatility, rather than a dampener," says one economist.

They foresee slowing the pace of rate hikes in the near, while emphasizing that a 50 bps increase next month would still be significant.

Facing the hottest cost pressures in 40 years, policymakers have lifted the target for the federal funds rate by 1.5% over the past two months—the steepest increase since the price-fighting era of Paul Volcker in the early 1980s.

As the Fed works to rein in inflation, it risks undermining the bargaining power workers have gained since the start of the pandemic.

Fed signals it will hold interest rates steady through at least 2023.