WASHINGTON -- The U.S. Federal Reserve on Wednesday kept its benchmark interest rate steady at a 22-year high of 5.25-5.50 percent, extending a pause that began in late July, but did not rule out another hike in the coming months.

The Fed's second consecutive decision to maintain the target range for the federal funds rate, which commercial banks charge each other for overnight loans, came as inflation remains elevated.

The U.S. central bank has left the door open to another rate hike as the world's largest economy is strong and core inflation remains well above its target of 2 percent.

In a statement, released after a two-day policy meeting, the Federal Open Market Committee revised upward its evaluation of the U.S. economy, saying that activity expanded at a "strong pace," a change from its previous assessment of a "solid pace."

It also noted job growth is "strong." While touching on the need to assess incoming economic data, the committee reiterated it is "prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of (its) goals."

Underscoring that policymakers are looking at "broader financial conditions," not just labor market and consumer data, Fed Chair Jerome Powell told a press conference, "Given how far we have come along with the uncertainties and risks we face, the committee is proceeding carefully."

Despite the Fed's strenuous efforts to tame price increases by raising interest rates repeatedly, the U.S. economy grew an annualized 4.9 percent in real terms from July through September, official data showed last week.

Driven by robust consumer spending, the initial estimate of gross domestic product for the third quarter expanded at its fastest pace in about two years.

The Labor Department said in mid-October that so-called core prices, excluding volatile food and energy costs, climbed 4.1 percent in September from a year earlier, although the figure marked its smallest increase in two years.

Since March 2022, the Fed has raised its key rate from near zero. In its projections released at the time of the September policy meeting, the Fed expected one more rate hike before the end of 2023.

Economists and investors have been watching for clues as to whether next month may bring a 12th hike in the central bank's tightening cycle.

Powell said Wednesday that "the process of getting inflation sustainably down to 2 percent has a long way to go."

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