US Fed keeps rates steady, balance sheet to fall up to $10 bn per month

Approves portfolio cuts in October; Fed still anticipates December interest rate hike

The US Federal Reserve left interest rates unchanged on Wednesday but signaled it still expects one more increase by the end of the year despite recent weak inflation readings.

New economic projections released after the Fed's two-day policy meeting showed 11 of 16 officials see the "appropriate" level for the federal funds rate, the central bank's benchmark interest rate, to be in a range between 1.25% and 1.50% by the end of 2017.

That is one-quarter of a point above the current level.

"The labor market has continued to strengthen ... economic activity has been rising moderately so far this