The Federal Reserve on Wednesday held benchmark interest rates near zero, but indicated rate hikes could be coming a bit sooner than expected while significantly cutting their economic outlook for this year.

Officials on the Federal Open Market Committee, which is responsible for policymaking, indicated that they would begin to reduce some of the stimuli the central bank provided during the financial crisis. It was not clear when, however, this could happen.

The FOMC released a post-meeting statement saying that “if progress continues as expected”, it was likely that asset purchases will slow down.

The committee unanimously voted to maintain short-term rates near zero in light of these expectations. However, the majority of committee members see the 2022 rate increase as the next step. When members released their last economic projections in June, only a small majority projected the rate hike to 2022.

Jerome Powell, Fed Chairman, will be speaking at the post-meeting news conference starting at 2:20 p.m. ET

Some significant adjustments were made to the Fed’s economic forecasts.

The Fed now predicts that GDP will grow by just 5.9% in 2018, compared with a forecast of 7% for June. However, the 2023 growth forecast is at 3.8%. That’s compared with 3.3% and 2.5% previously. It is up one-tenth to a percentage point.

FOMC members project that inflation will rise faster than was predicted. The core inflation forecast is to rise 3.7% in 2018, compared with the 3% predicted by members last month. Officials now expect inflation to rise by 2.3% in 2022, as opposed to 2.1% in June’s projection. They also anticipate it rising 2.2% in 2023. This is one-tenth of an percentage point more than what was predicted in June.

Although markets had not expected much from the meeting, they were anxious to see when the Fed would begin to reduce its monthly bond purchase pace.

Powell said in August at the Fed’s annual symposium, Jackson Hole (Wyoming), that Powell and others believed the central bank had achieved its inflation target. They could begin to decrease the monthly minimum of $120 billion in Treasurys and mortgage-backed security purchases.

Investors were also looking forward to this meeting to find out where Fed officials stood on inflation.

The Fed’s preferred inflation measure – the personal consumption expenditures index less food and energy prices – accelerated by 3.6% in July, the highest level in 30 years. Powell stated repeatedly that prices will ease as demand rises, supply chain issues, and goods shortages, all of which Powell reiterated.

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