The U.S. Federal Reserve kept interest rates unchanged but characterized the economy as strong, keeping the central bank on track to increase borrowing costs in September.

The Fed said economic growth has been rising strongly and the job market has continued to strengthen while inflation has remained near the central bank's 2% target since its last policy meeting in June, when it raised rates.

"Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly," the Fed said in a unanimous statement following the conclusion of its latest two-day policy meeting.

The Fed's decision left its benchmark overnight lending rate in a range of 1.75% to 2.00%.

The Fed currently expects another two rate rises by the end of the year. Federal funds futures implied traders are pricing in about a 91% chance of a rate rise in September and a 71% chance of an additional hike in December.

Market reaction to the Fed decision was muted as it met expectations on where the central bank would push policy rates, with the dollar slightly stronger against a basket of currencies and U.S. Treasury yields little changed.

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