In raising its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent, the Fed dropped its pledge to keep rates low enough to stimulate the economy "for some time" and signaled it would tolerate above-target inflation at least through 2020.
The central bank raised the federal funds rate to a 1.75-2 percent target range, the second increase under Fed Chairman Jerome Powell.
Negative for gold though is that the central bank also forecasts tame inflation pressures throughout year.
The Fed has raised rates seven times since late 2015 on the back of the economy's continuing expansion and solid job growth, rendering the language of its previous policy statements outdated.
While the course of interest-rate hikes remains gradual, the slightly more aggressive pace shows officials see more urgency to tighten policy, as unemployment already fell in May to the level they had forecast for year-end. It's the second rate hike under Powell, a Republican appointed to lead the Fed by President TrumpDonald John TrumpWhat you need to know about Tuesday's elections Danny Tarkanian wins Nevada GOP congressional primaryLaxalt, Sisolak to face off in Nevada governor's race MORE. "Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly".
Stay tuned to FOX Business for coverage of Powell's remarks starting at 2:30 p.m. ET.
Along with rising interest rate expectations.
They see another three rate increases next year, a pace unchanged from their previous forecast.
Updating their quarterly forecasts, officials projected the policy rate at 3.1 percent at the end of 2019, according to their median estimate - compared with 2.9 percent seen in March - and 3.4 percent in 2020, unchanged from the prior forecast.
The Federal Reserve expects the USA gross domestic product to grow by 2.8% in 2018, up from March's forecast of 2.7%. That compares with March's forecasts for 3.8 percent this year and 3.6 percent in the following two years. Inflation for the next two years is expected to remain at 2.1%, unchanged from the previous forecast.
Core inflation projections, which strip out volatile food and energy prices, is expected to tick slightly higher to 2.0% this year, up from March's projection of 1.9%.
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