U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, on June 12, 2024. [U.S. Federal Reserve/Handout via Xinhua]

The U.S. Federal Reserve held rates steady on Wednesday, but the central bank signaled a possible cut in September.

"If we get the data that we hope we get, a reduction of policy rate could be on the table at the September meeting," Fed head Jerome Powell said at a press conference, but added that the Federal Open Market Committee has made "no decisions about future meetings."

Powell said Fed officials understand the downsides of slashing rates too soon or too late.

"There was a real discussion back and forth of what the case would be for moving at this meeting," Powell said, referring to the Fed's meetings on Tuesday and Wednesday.

"The overall sense of the committee, as I mentioned, is that we're getting closer to the point at which it will be appropriate to begin to dial back restrictions. We're not at the point yet. We want to see more good data," Powell said.

The statement was a reiteration of numerous prior statements in which the Fed said officials continue to look at data in a bid to assess whether to cut rates.

Desmond Lachman, a senior fellow at the American Enterprise Institute and a former official at the International Monetary Fund, said: "There are a number of reasons why the Fed should be cutting interest rates at today's meeting. Inflation has come down to close to the Fed's 2 percent inflation target, the economy is slowing, and the labor market is no longer overheated."

"In addition, the global economy seems to be souring and the Fed's high interest rates are exacerbating the slow motion train wreck underway in the real commercial property market," Lachman said.

"My view is that this will once again be a case of the Fed doing too little too late," Lachman said.

Dean Baker, a senior economist at the Center for Economic and Policy Research, told Xinhua: "It is important to remember the Fed has two mandates. It can't wait until it is 100 percent certain that inflation is back at target. It has to keep in mind its full employment mandate.

At 4.1 percent, unemployment is not high, but it almost certainly could be somewhat lower and there is a real risk it will rise further in the rest of this year," said Baker.

Cutting interest rates so close to November's elections could have an impact on the race to the White House.

Brookings Institution Senior Fellow Darrell West said an interest rate cut before the election would be a plus for Democrats because it would be a strong sign that inflation has dropped.

"That has been one of Trump's leading talking points against Harris and a rate cut would make it more difficult for Republicans to say inflation still is a big problem," West told Xinhua, referring to GOP challenger Donald Trump, as well as presumptive Democratic nominee Vice President Kamala Harris.

At the press conference, Powell reiterated the central bank's independence from politics. "We never use our tools to support or oppose the political party, a politician, or any political outcome," said the Fed chief. "We are a non-political agency. We don't want to be involved in politics in any way. We wouldn't do that."

While the overall inflation level has dropped, prices remain high for things that Americans buy on a daily basis, namely, food and rent.

From 2019 to 2023, the all-food Consumer Price Index rose by 25 percent, according to the U.S. Department of Agriculture. It predicts that all food prices will increase by 2.2 percent in 2024.

The high cost of food disproportionately impacts lower-income households and individuals, as well as those on a fixed income.

Experts said inflation was sparked by profligate U.S. government spending during the COVID-19 crisis, and the central bank kept interest rates near zero for too long.