The Federal Reserve kept interest rates at a two-decade high on Wednesday, while leaving the door open for rate cuts as soon as its next meeting in September.

Why it matters: Inflation has receded alongside signs that high borrowing costs are taking a toll on the labor market—raising expectations that the Fed will lower rates soon.

• In a unanimous decision, the Fed kept its policy rate in a range of 5.25% and 5.5%, where rates have remained since last July.

What they’re saying: “The broad sense of the committee is that the economy is moving closer to the point at which it will be appropriate to reduce our policy rate,” chair Jerome Powell said in a post-meeting press conference.

• “The question will be whether the totality of the data evolving outlook in the balance of risks are consistent with rising confidence on inflation and maintaining a strong labor […]