Federal Reserve officials lowered their forecast to forecast for one rate cut this year, down from their previous projection of three cuts, because inflation, despite having cooled in the past two months, remains persistently above their target level.

That forecast is derived from the individual predictions of 19 policymakers, and Powell noted that 15 of the officials projected either one or two rate cuts this year.

The projections have significant implications for real estate developers and lenders who had earlier in the year been hoping for multiple rate-cuts that could bring the cost of development financing down.

The scaled-back estimate for rate cuts came as something of a surprise, given that the government reported earlier Wednesday that consumer inflation eased in May more than most economists had expected. That report suggested that the Fed’s high-rate polices are succeeding in taming inflation.

Speaking at a news conference after the Fed meeting ended, Chair Jerome Powell seemed to downplay the significance of the policymakers’ collective forecast of just one rate cut in 2024.

Speaking at a news conference after the Fed meeting ended, Chair Jerome Powell seemed to downplay the significance of the policymakers’ collective forecast of just one rate cut in 2024.

“No one,” the Fed chair added, “brings to this a really strong commitment to a particular rate path. It’s just what they think in a given moment in time.”

Some economists say two rate cuts, with the first one coming as early as September, are still possible despite the central bank’s prediction of just one.

“I don’t think September’s off the table,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank, said. “To get there, you’d have to have a string of inflation reports like the one we got this morning.”

In its policy statement, the Fed noted that the economy is growing steadily, while hiring has “remained strong.” Fed officials also noted that in recent months there has been “modest” further progress toward their 2 percent inflation target. That is a more positive assessment than after the Fed’s previous meeting May 1, when the officials had noted a lack of progress.

Still, the central bank’s leader made clear that further improvement is needed.

“We’ll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2 percent,” Powell said.

Asked at his news conference about the eventual need for rate cuts, Powell said, “We think ultimately if you set [interest rate] policy at the restrictive level, eventually you will see real weakening in the economy.”

Though the economy has managed to keep growing despite the high rates the central bank has engineered, the Fed chair said that “ultimately, we think rates will have to come down to continue to support that. So far, they haven’t had to.”