US Federal Reserve leaves key rate unchanged, signals future hikes | FULL

U.S. Federal Reserve Chair Jerome Powell said Wednesday the central bank would leave interest rates unchanged but said that future rate hikes would be needed to bring inflation down to two per cent.

New economic 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 5.50%-5.75% range by the end of the year.

Powell said the right conditions are “coming into place” to get inflation down to the two per cent mark.

“The things are in place that we need to see, but the process of that actually working on inflation is going to take some time,” he said.

Combined, the rate outlook and the projections are likely to lead investors to expect a resumption of quarter-percentage rate increases beginning at the next policy meeting in July.

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