The US Federal Reserve (Fed) on Wednesday kept interest rates at their highest level in more than two decades and maintained its plan to cut borrowing costs three times this year, AFP reported.

Overnight rates remain between 5.25% and 5.50%, the Fed said in a statement following a unanimous decision by members of the Federal Reserve Committee (FOMC).

Fed members, who significantly raised their forecast for US GDP growth to +2.1% this year from +1.4% previously, still foresee three rate cuts of a quarter of a percentage point in 2024.

However, the Committee is less optimistic about 2025, forecasting only three further interest rate cuts to 3.9% instead of four as previously expected.

Markets expected this status quo.

In its statement, identical to its previous meeting in January, the Federal Reserve called the U.S. economy “robust” with “strong job growth” and the unemployment rate remaining at 3.9%.

In its new economic outlook, the Fed, like three months ago in its most recent projections, sees inflation at 2.4% in 2024, trying to fall below current levels, according to the PCE index.

The unemployment rate will rise less than expected to 4% this year and 4.1% next year.

The Committee reiterated that it “does not expect to lower the target rate until it is more confident about the sustainable path of inflation to the 2% target”.