Federal Reserve keeps interest rate unchanged

The Federal Reserve kept its benchmark interest rate unchanged Wednesday as it lowered its growth forecast for the US economy, citing soft business investment and exports.

But the Fed still expects possibly two interest rate increases this year, saying the economy continues to expand "at a moderate pace despite the global economic and financial developments of recent months."

In revisions to its buoyant December forecasts, the Federal Open Market Committee, the Fed's policy body, said it expects the US economy to grow only 2.2 percent this year, compared with 2.4 percent previously.

"Global economic and financial developments continue to pose risks," the FOMC said in its policy statement.

It also said that inflation would likely remain very low at 1.2 percent by the end of the year, far shy of the Fed's 2.0 percent policy target.

As a consequence, FOMC officials pulled back on their previous projections of up to four quarter-point interest rate increases this year after raising the federal funds benchmark to 0.25-0.50 percent in December.

In fresh projections the central bank's policymakers said they expect a rate of about 0.9 percent at year-end, on average, implying possibly two increases this year. — Agence France-Presse