The US Federal Reserve held interest rates steady for a fourth consecutive meeting on Wednesday, forecasting higher inflation and cooler growth this year while US President Donald Trump's tariffs begin to take hold and geopolitical uncertainty looms.

The Fed kept the benchmark lending rate at a range between 4.25 percent and 4.5 percent at the end of its two-day meeting, with officials pencilling in two rate cuts this year, similar to earlier projections.

The move is likely to draw the ire of Trump, who has repeatedly pressured the independent central bank for rate reductions, and on Wednesday called Fed Chair Jerome Powell "stupid" for not lowering rates more quickly.

But the Fed said in a statement that "uncertainty about the economic outlook has diminished but remains elevated."

On Wednesday, the Fed cut its expectations for US economic growth this year, and raised its inflation and unemployment forecasts in updated projections.

The rate decision was in line with analysts' expectations. Observers largely expect policymakers to adopt a wait-and-see approach this year as they monitor the effects of Trump's tariffs on the world's biggest economy.

While economists have warned that sweeping levies could fuel inflation and weigh on growth, these have not caused widespread price surges so far. (AFP)