As expected, the Federal Reserve left interest rates unchanged at its two-day meeting on monetary policy that ended Wednesday.

Not so expected was the quarterly update to its dot-plot forecast of coming rates. As in December, the Fed still projects three rate cuts of 25 basis points coming in 2024, dropping the median benchmark rate to 4.6%, from its current 5.25% to 5.5%.

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Many market participants were surprised that the Fed did not reduce its forecast for this year, given recent data and the policy statement’s acknowledgement of stickier core inflation, a still-robust labor market, and stronger-than-expected GDP growth.

Benchmark 10-year Treasury yields dropped after the decision, boosting gold by decreasing the opportunity cost for holding it instead of bonds for safety. The dollar retraced its earlier gains.

Separately, the CBO is projecting US public debt to reach its highest level ever in 2029, at 107% of the total US economy. By 2054, this debt will swell to 166% of the economy.

Platinum slipped 0.2% while palladium added less than 0.1%.

At the New York spot close: Gold added $1.30, to $2,161; silver dipped 3 cents to $24.93; platinum slipped $1.70 to $899.40; and palladium picked up 80 cents to $1,000.20 an ounce.

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