The Federal Reserve spent a good part of 2022 and 2023 implementing interest rate hikes in response to rampant inflation. But now, the central bank needs to reverse some of those hikes as inflation cools.

The central bank’s decision to pause at its first meeting of 2025 followed a series of cuts that began in September to account for progress already made on getting inflation down. Over the course of three meetings, the Fed lowered rates by a full percentage point to a range of 4.25 percent to 4.5 percent, which was maintained on Wednesday.

The January jobs report revealed a drop in the unemployment rate to 4%, accompanied by payroll gains of 143,000. A Fed interest rate cut in March is now very unlikely.