The US Federal Reserve voted on Wednesday to hold interest rates at a 23-year high for a fifth consecutive meeting, and signalled it still expects to make three rate cuts this year.

The Fed's decision to keep its key lending rate between 5.25 percent and 5.50 percent lets policymakers "carefully assess incoming data, the evolving outlook, and the balance of risks," the central bank said in a statement.

The Fed has successfully brought inflation down sharply from multi-decade highs in 2022 towards its long-term target of two percent.

But the United States has seen a small uptick in the pace of inflation since the start of this year – renewing fears that interest rates will have to remain high for longer to bring prices under control.

Policymakers also updated their economic forecasts on Wednesday, sharply upgrading the US growth outlook for this year to 2.1 percent from 1.4 percent in December.

Policymakers left the headline inflation forecast unchanged but slightly raised the outlook for annual "core" inflation – excluding energy and food prices – to 2.6 percent.

Members of the rate-setting Federal Open Market Committee also left the median projection for interest rates at end-2024 at the midpoint between 4.50 and 4.75.

This means they still expect 0.75 percentage points of cuts before year-end, which would likely translate into three 0.25 percentage point cuts. (AFP)