Today's big Fed news was not the central bank's decision on interest rates, which officials kept at the highest in two decades.

• Rather, the headline was in updated projections that show policymakers see only one rate cut in 2024—and even that will depend on whether inflation data cooperates.

Why it matters: As recently as March, the median Fed official envisioned as many as three cuts this year. Now they expect a considerably more cautious path after a string of hot inflation reports at the start of 2024.

The big picture: The May Consumer Price Index — released just hours before this afternoon's Fed decision — showed inflation slowing for the second straight month.

• Fed chair Jerome Powell acknowledged the report was good news. Still, officials want to see more like it before slashing rates.

What they're saying: "The economy has repeatedly surprised forecasters in both directions," Powell said at a news conference in response to an Axios question.

• "Today was certainly a better inflation report than almost anybody expected, and we'll just have to see what the incoming data flow brings."

Fed officials moved up their forecast for inflation this year: The median official now expects 2.6% inflation in 2024, an estimate Powell characterized as "conservative."

What to watch: The projections show that officials anticipate the economy and labor market will keep chugging along.

• They expect the economy will grow 2.1% this year while the unemployment rate finishes the year at 4%, where it now stands.

Investors today celebrated the Fed's decision and this morning's inflation report and sent the S&P 500 to close at a new record above 5,400.

Why it matters: While more economic data is needed to confirm the sustainability of easing prices, the markets gained at least a little more certainty about the Fed's macro policy.

📈 Apple overtook Microsoft as the most valuable company again. (Reuters)

🇪🇺 The European Union is planning to impose tariffs on imported Chinese EVs. (WSJ)

🍿 Sony Pictures is buying the Alamo Drafthouse movie chain. (Axios)

▪ 16 Handles self-serve yogurt founder Solomon Choi has died at 44. (Nation's Restaurant News)

Affirm's stock continued its upward streak following news yesterday that its buy now, pay later offering will be available to Apple Pay users in the U.S. this year.

Why it matters: The move greatly boosts Affirm, and the BNPL market in general, and shows Apple is willing to play nice with some would-be competitors.

Zoom in: At its Worldwide Developer Conference this week, Apple announced a series of new payment options being built into Apple Pay with the release of iOS 18 this fall.

• Those include the ability to redeem rewards from certain credit card partners, access installments from some others, and apply for BNPL loans directly through Affirm at checkout.

The impact: Wall Street was bullish on the move, with Affirm shares rising 5.8% to $35.75 today.

Go deeper: If you need smart, quick intel on fintech dealmaking, get Axios Pro

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