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Fed still expects 3 rate hikes this year, but will pick up the pace in 2019

Key Points
  • The Fed left its 2018 outlook for the federal funds rate unchanged on Wednesday.
  • The central bank, however, upped its outlook for both 2019 and 2020.
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Fed: 2018 rate outlook unchanged at 3 hikes

The Federal Reserve said Wednesday that it sees the federal funds rate at 2.1 percent by the end of 2018, unchanged from its December forecast.

But the central bank raised its 2019 projection, saying it sees the benchmark rate at 2.9 percent. That's up from the 2.7 percent estimate it published in December.

The Fed also upped its 2020 forecast to 3.4 percent from 3.1 percent.

Federal Reserve Chairman Jerome Powell speaks during a news conference March 21, 2018 in Washington, DC.
Getty Images

On Wednesday, central bankers also approved the widely expected quarter-point hike that puts the new benchmark funds rate at a target of 1.5 percent to 1.75 percent. It was the sixth rate increase since the policymaking Federal Open Market Committee began raising rates off near zero in December 2015.

Four times a year Federal Reserve policymakers at the FOMC submit their projections about where short-term interest rates are headed. The results are the central bank's so-called dot plot — a visual representation of how many members think rates will hit a given level over the short, medium and longer run.

Here are the Fed's latest targets, released in Wednesday's statement:

This is what it looked like in December:

December 2018 Dot Plot Fed 171213