A slim majority of U.S. Federal Reserve officials reaffirmed projections to cut the federal funds interest rate three times in 2024 in the central bank’s latest Federal Open Markets Committee release, despite higher-than-expected inflation in recent months.

Meanwhile, the Fed elected to maintain its target federal funds rate at 5.25-5.5% for a seventh straight month — a 23-year high. 

The federal funds effective rate hovered between 0.05% and 0.10% from April 2020 through February 2022 before increasing dramatically to 5.06% by May 2023. It ticked up the next three months before holding at its current rate since August 2023.

Consistent with its previous December projection, the Fed’s quarterly dot plot — a chart that records each of the 19 FOMC participants’ projection for the bank’s key short-term interest rate — showed that Fed officials overall see the rate peaking at 4.6% in 2024. Given that the Fed has moved in 25-basis-point increments over the past year or so, this indicates that the bank will cut rates by 0.75% by the end of 2024.

Of those 19 FOMC projection participants, 17 predict a rate cut in 2024 while just two foresee no cut, and one official sees only one cut. Only one official projects the Fed to cut rates by more than 0.75% this year, compared to five in December. None of the participants see rates climbing higher in 2024.

The bank’s long-term goal is to bring inflation back down to its 2% target.