Powell said the labor market's outlook hasn't changed much since the central bank's September meeting, when it penciled in two more rate cuts this year.

By Anushree Mukherjee (Reuters) -Gold extended its rally to breach $4,200-per-ounce for the first time on Wednesday on expectations of more U.S. interest rate cuts, while broader economic and geopolitical uncertainty also led investors to buy the safe-haven metal.

The Federal Reserve is doing a difficult balancing act, trying to tamp down inflation while lifting up the job market, Chair Jerome Powell said Tuesday.

President Susan Collins said the US central bank should continue lowering interest rates this year to support the labor market, while keeping them high enough to make sure inflation remains in check.

U.S. banks borrowed $6.5 billion from the Federal Reserve's Standing Repo Facility (SRF) on Wednesday, central bank data showed, and repurchase rates rose, suggesting tightness in meeting funding obligations with a large net Treasuries settlement due this week.

Fed Chair Jerome Powell on Tuesday said the central bank is nearing a point where it will stop reducing the size of its bond holdings.