Fed sees slower growth, higher inflation ahead

WASHINGTON — The Federal Reserve kept its benchmark interest rate unchanged Wednesday and signaled it still expects to cut rates twice this year, though it said the outlook is more uncertain.

The Fed also now expects the economy to grow more slowly this year and next than it did three months ago, according to a set of quarterly economic projections. It also expects the unemployment rate to tick higher, to 4.4%, by the end of this year. Policymakers also expect inflation will pick up slightly this year, to 2.7% from its current 2.5%.

"Uncertainty around the economic outlook has increased," the Fed said in a statement released after its two-day meeting.