The Federal Reserve paused its rate-cut cycle on Wednesday, keeping its benchmark interest rate at roughly 3.6% after three reductions last year, defying President Donald Trump's mounting pressure for cuts.

The central bank said in a statement that there are signs the job market has stabilized, while it also said growth was "solid," an upgrade from last month's characterization as "modest."

With the economy growing at a healthy pace and no signs of deterioration in hiring, Fed officials likely see little reason to rush any further rate cuts. While most policymakers do expect to reduce borrowing costs further this year, many want to see evidence that stubbornly-elevated inflation is moving closer to the central bank's target of 2%. According to the Fed's preferred measure, inflation was 2.8% in November, slightly higher than a year ago.

Two officials dissented from the decision, with Governors Stephen Miran and Christopher Waller preferring another quarter-point reduction. President Donald Trump appointed Miran in September, while Waller is under consideration by the White House to replace Chair Jerome Powell, whose term ends in May.

The Fed's decision to stand pat will likely fuel further criticism from Trump, who has assailed Powell for months for not sharply cutting short-term rates. When the Fed reduces its key rate, it tends to lower borrowing costs for things like mortgages, car loans, and business borrowing, though those rates are also influenced by market forces.