The Federal Reserve announced on Wednesday that it will keep interest rates unchanged at 4.25-4.5%, but still maintains the forecast of two rate cuts totaling 50 bps this year. It stated that the uncertainty in the U.S. economic outlook is beginning to dissipate, although it remains elevated.

The latest statement from the Fed noted that inflation forecasts have spiked, while the unemployment rate remains low. The agency expected the inflation rate to hike to 3% this year; core inflation was also revised up to 3.1%, above the 2.8% forecast in March.

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As to the job market, the Fed's statement changed its previous assessment from “stable at low levels” to “unemployment rate remains low”, predicting that the unemployment rate will only climb to 4.5% by the end of the year, similar to the 4.4% forecast in March.

In terms of economic growth, the Fed lowered the full-year economic growth forecast to 1.4%, down from the 1.7% predicted in March.

Federal Reserve Chairman Jerome Powell will speak at 2:30 PM Eastern Time.

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