Federal Reserve Chair Jerome Powell (Photo: Xinhua/VNA)

Fed policymakers said US monetary policy will be kept significantly tighter through 2024 than previously expected.

The Fed's decision comes despite 12 of 19 officials favoring another rate hike in 2023 to ensure that inflation continues to decelerate.

Fed policymakers expect the policy rate to fall to 5.1% by the end of next year, up from the agency's forecast of 4.6% in June. The Fed forecasts that interest rates will then fall to 3.9% by the end of 2025 and 2.9% by the end of 2026.

Meanwhile, the US Central Bank continued to predict that inflation will fall below 3% next year, and return to 2% in 2026. But economic growth is expected to slow next year to about 1.5%, from 2.1% this year.