WASHINGTON -- The US Federal Reserve on Wednesday left interest rates unchanged at a 22-year high of 5.25 percent to 5.5 percent, as inflation continues to be cooling, hinting that a rate cut might come as soon as September.

"Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee's 2 percent inflation objective," the Federal Open Market Committee (FOMC), the Fed's policy-setting body, said in a statement after a two-day policy meeting.

Regarding the Fed's statement, the language reflected an improvement compared to the June meeting. Previously, the policy statement mentioned only "modest further progress" in reducing price pressures.

The committee reiterated that it does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.

In addition, the committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, the statement said.

When asked whether a September rate cut is a reasonable expectation, US Federal Reserve Chair Jerome Powell told reporters at a press conference Wednesday afternoon that "we have made no decisions about future meetings. That includes the September meeting."

The Fed chair, however, noted that "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."

Noting that the last couple of inflation readings have "added to confidence," Powell said "we've seen progress across all three categories of core PCE inflations, goods, non-house services, and housing services."

In the second quarter, the personal consumption expenditures (PCE) price index increased 2.6 percent, compared with an increase of 3.4 percent in the first quarter, according to the Commerce Department's Bureau of Economic Analysis. Excluding food and energy prices, the PCE price index increased 2.9 percent in the second quarter, compared with an increase of 3.7 percent in the previous quarter.

"We think the time (for a rate cut) is approaching. If we get the data that we hope we get, a reduction or policy rate could be on the table at the September meeting," the Fed chief said.