Federal Reserve officials expect to start raising interest rates in 2023, earlier than previously forecast, according to new economic projections that predicted faster growth and sharply higher inflation this year.

At the end of its two-day policy meeting on Wednesday, the US central bank kept its main interest rate on hold at the rock-bottom range of 0 to 0.25 per cent, where it has been since the start of the pandemic.

But whereas in March, when most Fed officials predicted that current rates would be maintained until at least 2024, the consensus has shifted towards an earlier lift-off in 2023, signalling the central bank’s belief in a faster transition to a full recovery and tighter monetary policy. The Fed’s projections indicate at least two rate increases are expected in 2023.