The US Federal Reserve left interest rates unchanged on Wednesday and said that just one rate cut is planned for this year, down from the three expected in March.

The Fed voted unanimously to maintain its benchmark interest rate between 5.25 and 5.50 percent, and said in a statement that "modest" progress had been made toward its long-term inflation target of two percent.

The announcement suggests that central bank officials remain wary about cutting rates too soon, despite consumer inflation data published earlier Wednesday, which pointed to a slowdown in the rate of price increases in May.

The annual consumer price index (CPI) came in at 3.3 percent last month, down 0.1 percentage point from April and unchanged on a monthly basis, the Labor Department said. This was slightly below expectations.

Policymakers lowered their individual forecasts for the number of rate cuts they expect this year, reducing the median projection for interest rates at end-2024 to the midpoint between 5.00 and 5.25 percent.

This means that FOMC participants only expect one 0.25 percentage point cut before year-end, two less than in the last update in March.

Fed officials also raised their inflation forecasts for 2024 and kept their growth outlook unchanged.

Fed Chair Jerome Powell said that they will need to see more positive data including "good inflation readings" before it feels confident enough to lower interest rates

"If the labor market were to weaken unexpectedly or if inflation were to fall more quickly than anticipated, we're prepared to respond,” Powell said.

"We're prepared to maintain the current target range for the federal funds rate as long as appropriate," Powell added at the press briefing.