The Federal Reserve held interest rates steady at its meeting on Wednesday, but signaled that it expects to continue raising rates gradually in the coming months. The central bank’s decision reflects its assessment of a strengthening economy and rising inflation.

Economic Outlook

The Fed noted that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, and the unemployment rate has remained low. Inflation has also been rising, and is now close to the Fed’s 2 percent target.

Future Rate Hikes

The Fed’s statement indicated that it expects to continue raising rates gradually in the coming months. The central bank said that it expects further gradual increases in the federal funds rate will be consistent with sustained economic growth, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective.

Market Reaction

The stock market was little changed after the Fed’s announcement. Bond yields rose slightly, reflecting expectations of further rate hikes.

Key Takeaways:

• The Fed held interest rates steady at its latest meeting.
• The central bank signaled that further gradual increases are likely.
• The Fed cited a strengthening economy and rising inflation as reasons for its outlook.