The Fed needs to stay flexible in the face of policy uncertainty, even as price growth heads toward 2%. Plus, investment newsletter commentary on market breadth, Los Angeles’ recovery, consumer sentiment.

Federal Reserve officials held interest rates steady, pausing to assess the inflation outlook following a string of rate reductions last year.

The central bank needs to see further progress on inflation or weakness in the labor market to resume interest rate cuts.

The Federal Reserve’s preferred inflation gauge moved even higher in December, driven largely by rising energy prices as well as food. However, a closely watched measurement of underlying inflation trends indicated some progress in the fight to rein in price hikes.

The Federal Reserve's preferred inflation gauge, known as the personal consumption expenditures index, rose in December in line with economists' expectations.

Wall Street's main indexes rose on Friday, driven by gains in Apple following its strong sales forecast and a reading of the U.S. central bank's favored inflation gauge which aligned with expectations that the Fed would keep borrowing costs steady.