Fed keeps interest rates steady: Here's what to know

WASHINGTON - The Federal Reserve on Wednesday announced it would keep interest unchanged and predicted at least one rate cut later this year.

This is the second time the Fed kept rates on hold, which is currently at 3.6%. 

What does this mean for the US economy? 

Dig deeper:

By keeping the interest rate the same, with one cut predicted some time this year, officials at the Fed said the spike in gas prices due to the war in Iran will have short-lived impacts on inflation and the economy. 

By the numbers:

Fed officials expect inflation to fall to 2.2% by 2027 and eventually to 2% by 2028.

Inflation is expected to be 2.7% at the end of this year, up from their December forecast but slightly below the 2.8% it reached in January. 

Officials expect core inflation, which does not include volatile food and energy categories, to also finish the year at 2.7%, up from a previous forecast of 2.5%.

Gas prices jumped Wednesday to a nationwide average of $3.84 a gallon, according to AAA, up 92 cents from a month ago. The increase will push inflation much higher in March, but the Fed expects those spikes to unwind by the end of the year, particularly if the conflict ends soon.

The Fed also expects that the war will have no lasting impacts on growth or unemployment. 

Officials still see the unemployment rate at 4.4% at the end of this year, the same as it is now. And they project the economy will grow 2.4% this year, up slightly from a 2.3% forecast in December.

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