Fed holds rates steady, sees two small hikes by end of year

In an effort to balance risks to the economy with a still unresolved fight to control inflation,"holding the target range steady at this meeting allows the committee to assess additional information and its implications for monetary policy," the rate-setting Federal Open Market Committee said in a unanimous policy statement issued at the end of its latest two-day meeting.

The new projections, adding a hawkish tilt to Wednesday's interest rate decision, show policymakers at the median see the benchmark overnight interest rate rising from the current 5.00%-5.25% range to a 5.50%-5.75% range by the end of the year. Half of the 18 Fed officials penciled in their"dot" at that level, with three seeing the policy rate moving even higher - including one official who sees it rising above 6%.

The higher rate outlook coincides with an improved view of the economy and, consequently, slower progress in returning inflation to the central bank's 2 per cent target. Fed Chair Jerome Powell will hold a press conference at 2.30pm EDT to elaborate on the outcome of the meeting.

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