US Federal Reserve officials left interest rates unchanged on Wednesday, skipping a rate increase after raising them 10 times in a row, but predicted that they would likely lift them again this year.

The Fed, in its policy statement, said it was giving itself time to assess how the economy is reacting to what has been a steady campaign to slow demand and wrestle rapid inflation back under control.

The central bank has raised rates to a range of 5 to 5.25 per cent over a little more than a year.

But officials predicted that they might raise interest rates even further — to 5.6 per cent by the end of 2023 — based on fresh economic forecasts.

That suggests policymakers expect to make two more rate increases, a clear signal that Fed officials remain concerned about inflation and think that they may need to do more to cool growth and control price increases.

“Holding the target range steady at this meeting allows the committee to assess additional information and its implications for monetary policy,” the Fed said in its post-meeting statement.

“In determining the extent of additional policy firming that may be appropriate to return inflation in the economy to 2 per cent over time, the committee will take into account the cumulative tightening of monetary policy,” among other factors.

Fed officials try to keep inflation climbing at a pace of 2 per cent a year, but its rise has been much more rapid than that since early 2021.

That is why central bankers have been rapidly raising interest rates, making mortgages and business loans more expensive in a bid to cool the economy, causing consumers to pull back and forcing companies to stop raising prices so much.

New York Times News Service