The US Federal Reserve announced that it would keep its interest rate and asset purchase program unchanged, while raising expectations for inflation and economic growth.
The central bank held the target range for its benchmark policy rate unchanged between zero and 0.25%, with expectations of keeping it unchanged until the labor market recovers and the inflation rate is closer to the target.
It also decided to continue asset purchases at $120 billion per month, until “substantial further progress" is made on employment and inflation.
The quarterly projections showed that US Federal Reserve officials saw at least two hikes by the end of 2023.
On the other hand, the Federal Reserve raised its forecast for GDP growth this year to 7%, compared to the previous estimates issued in March at 6.5%.
The central bank fixed its forecast for the growth of the US economy next year at 3.3%, while raising estimates for the rise in 2023 to 2.4%.
The Federal Reserve expects inflation at 3.4% by the end of this year, compared to previous estimates of 2.4%. It also raised its expectations for the next two years to 2.1% and 2.2%, respectively.
Regarding the labor market, the central bank expects the US unemployment rate to hit 4.5% this year -- same as the previous forecast in March. It lowered the estimates for 2022 to 3.8% from 3.9% previously.
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