Washington CNN  —  The Federal Reserve is expected to deliver a crucial hint Wednesday that it might lower borrowing costs in the coming months when it announces its widely anticipated decision of keeping interest rates at their current levels for the eighth time in a row. The central bank kicked off an aggressive rate-hiking campaign in early 2022 to curb the highest inflation in decades. The Fed has seen some substantial progress since then. Inflation is now considerably below the four-decade high from two years ago, and after stalling out in the first three months of the year, price pressures began to slow again in the second quarter. America’s labor market remains solid, but it has loosened up over the past year, with unemployment recently rising to its highest level in more than two years and job openings roughly back to pre-pandemic levels. Fed officials in recent speeches have said they’re pleased with the latest inflation data, acknowledging the steady progress but saying they’re not quite fully comfortable yet with slashing rates. Fed Governor Christopher Waller, seen as a key messenger of Fed policy moves, said earlier this month that “while I don’t believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted.” Economic development and residential construction have been booming in fast-growing Tampa, Florida. Joe Sohm/Visions of America/Universal Images Group/Getty Images Related article See where inflation is the highest and lowest in America Other officials have pointed to the effects of inflation-adjusted interest rates on the economy, which inherently rise if inflation slows but rates remains unchanged. “We are tightening,” Chicago Fed President Austan Goolsbee told The Wall Street Journal in an interview. “We set this rate when inflation was over 4%, and inflation is now, let’s call it, 2.5%. That implies we have tightened a lot since we’ve been holding at this rate.” Goolsbee, known for staking out a so-called “dovish” stance, or one that prefers to avoid unnecessary damage to the economy from high interest rates, is casting a vote for this month’s policy decision, since Cleveland Fed President Loretta Mester retired last month. Fed Chair Jerome Powell’s post-meeting news conference, scheduled for 2:30 pm ET, could give markets some much-needed clarity on the timing of the first rate cut, but economists say he likely won’t give markets a strong signal for an upcoming rate cut just yet. He has said that an unexpected weakening in the labor market would prompt the Fed to consider cutting rates sooner than expected. Sticking the soft landing? It’s difficult to overstate the rarity of the economic times that Americans are currently living in. The US economy is carefully threading a needle to achieve a very rare outcome known as a “soft landing” — a situation in which inflation slows to the Fed’s 2% target without a recession, of which there aren’t any signs for the foreseeable future. The latest GDP report provided the best evidence for that slowly unfolding reality. A family views shoes at a Sketchers retail store at the Barton Creek Square Mall on July 16, 2024 in Austin, Texas. Brandon Bell/Getty Images Related article What you need to know about America’s shockingly good economic report Economic growth in 2024 has been solid so far, despite the highest interest rates in nearly a quarter century. There has been some evidence of the broader American economy losing steam in some areas, such as US consumers opting for cheaper alternatives, rising consumer debt levels and workers not quitting their jobs as much as they did in recent years. But the US economy is still holding up overall. “The numbers do reflect a soft landing,” Kathleen Grace, managing member and chief executive of Fiduciary Family Office, told CNN. “But it’s hard to predict what inflation will do with a backdrop of strong corporate earnings and a consumer that is still spending.” A few weeks ago, the Fed’s Waller said that “current data are consistent with achieving a soft landing, and I will be looking for data over the next couple months to buttress this view.” Powell has emphasized that victory in wrangling price pressures requires inflation to be at 2% in a “sustainable” manner, meaning that it must be hovering around that level for at least a few months. The Fed monitors the economy’s health overall, so officials parse every major piece of economic data such as the Labor Department’s upcoming jobs report on Friday. But the Fed’s decision to cut rates will be mainly based on inflation readings, absent any concerning news about the job market. The Fed’s July monetary policy meeting concludes Wednesday, with an announcement at 2 pm ET, followed by a 2:30 pm ET press conference led by Chair Powell.