The US Federal Reserve has decided to leave its benchmark interest rate unchanged. It had raised the rate repeatedly since March 2022 as part of efforts to combat inflation.

Policymakers made the announcement following their latest meeting on Wednesday. It is their final policy decision of 2023 and the third straight time they have left the interest rate unchanged.

The inflation rate has pulled back from a peak last year of 9.1 percent. In November, it fell to 3.1 percent, which still remains higher than the Fed's goal of 2 percent.

Chair Jerome Powell told reporters that prices are "too high" and the path forward "uncertain."

Powell said, "No one is declaring victory. That would be premature, and we can't be guaranteed of this progress. So, we're moving carefully and making that assessment of whether we need to do more or not."

Policymakers have already lifted interest rates to their highest level in 22 years. However, Powell said they are likely "at" or "near" their peak.

The policymakers also project that they will cut rates three times next year.

US Federal Reserve Chair Jerome Powell has taken a cautious stance about expectations for a cut in interest rates. He spoke at an event in Georgia on Friday ahead of the next central bank meeting, which starts December 12.

Powell touted the "strong actions" that he and his colleagues have taken by imposing rate hikes to cool record-high inflation that at one point climbed over 9 percent.

Investors have been trying to guess when the rates might start coming down again. However, Powell said he and his colleagues are "carefully" moving forward. He added that it is premature to "conclude with confidence" that they have achieved a sufficiently restrictive stance, or to speculate on when they might ease their policy. He said they could still raise rates if it becomes "appropriate to do so."

The Fed wants to bring inflation down to 2 percent. Powell said that, excluding volatile commodities like food and energy, core inflation is now at 2.5 percent. Still, he added, they will keep their policy "restrictive."

Policymakers want to avoid another spike in inflation or even a recession. Powell said they will take things "meeting by meeting" by looking at fresh data and balancing the risks.