The central bank's new median forecast projects the Fed's benchmark rate at 3.1 percent by the end of 2019, up from 2.9 percent in the previous forecast.
The Fed had said its key rate "is likely to remain, for some time, below levels that are expected to prevail in the longer run".
In sum, today's statement can be seen as slightly more hawkish than what markets were pricing in ahead of time, given the upgraded outlook for two more hikes this year and the additional hike being planned for next year.
The rate hike on Wednesday was the seventh in this cycle and effectively marked a shift to a neutral stance in which the policy rate matches inflation at just under 2 percent, leaving zero "real" accommodation. "The Fed is prepared to be quicker about pushing rates higher".
The 10-year U.S. Treasuries yield hit a three-week high of 3.010 percent before quickly slipping back to 2.973 percent.
Powell is scheduled to speak to reporters Wednesday afternoon.
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So-called core inflation - which excludes volatile items like energy and housing - is now 2.2 percent, around the level the Fed is looking for. While the national economy appears to be on solid ground for 2018, the Fed must now consider how growing worldwide trade disputes could slow US growth.
In addition to a new dot plot, the Fed updated its forecasts for economic growth and inflation.
"In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realised and expected economic conditions relative to its maximum employment objective and its symmetric 2 per cent inflation objective". Consumer and business spending is powering the economy, in part a result of the tax cut President Donald Trump pushed through Congress late past year.
Officials lowered their jobless-rate estimates after unemployment fell to 3.8 per cent as of May, matching April 2000 as the lowest reading since 1969. It then raised rates once in 2015, once in 2016, three times in 2017 and now twice this year.
The economic expansion has survived for nine years and is now the second-longest in history.
The rate increase was in line with investors' expectations and showed policymakers' confidence in the economy's growth prospects, continued low unemployment and steady inflation.
Keeping investors in check were concerns about US threats to impose tariffs on billions of dollars in Chinese goods.
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