The US Federal Reserve left interest rates unchanged at a 22-year high on Wednesday as inflation continues to fade from its highest level in a generation. Jerome Powell, its chairman, cautioned that the Fed’s campaign to bring down price growth has “a long way to go” as it left the door open to further rate hikes. Policymakers are closely monitoring the strength of the world’s largest economy, which has remained unexpectedly resilient in the face of the fastest string of rate increases in four decades. The Fed opted to maintain its benchmark federal funds rate at a range of between 5.25% and 5.5% following a two-day policy meeting. Powell stressed that it remained “strongly committed” to reducing inflation. “Recent indicators suggest that economic activity has been expanding at a strong pace – well above earlier expectations,” he told a news conference. Officials at the Fed embarked upon an aggressive battle against inflation in March last year. They last ordered a hike in July, however, and have since opted to wait and see whether they have done enough. “Recent indicators suggest that economic activity expanded at a strong pace in the third quarter,” the Fed said in a statement. “Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.” September’s US consumer price index – which showed inflation rising at 3.7% on the year – was markedly lower than the peak of 9.1% in June 2022, but still significantly higher than the Fed’s medium-term 2% target. At the same time, the country’s economy has been growing at its fastest pace in almost two years. Gross domestic product increased at an annualized rate of 4.9% during the third quarter. The labor market has remained equally robust, adding 336,000 jobs in September as the unemployment rate held firm at 3.8%. The latest non-farm payrolls data, for October, will be released on Friday. Officials are “not confident” that the Fed has, or has not, raised rates as high as they need to be, Powell said. “We haven’t made any decisions about future meetings.” Policymakers are due to convene for their next rate-setting meeting on 12 December. Nancy Vanden Houten, lead US economist at Oxford Economics, said: “We don’t expect further Fed rate hikes, but the risks continued to be tilted in that direction. The Fed needs to see more evidence of slower job and wage growth to be convinced that inflation is on a sustainable path back to 2%.”