The Federal Reserve stayed on course for a further increase in short-term interest rates as soon as next month as it highlighted the strength of the US economic expansion alongside inflation that is hovering close to target.The central bank held the target range for the federal funds rate at 1.75 per cent to 2 per cent, as widely expected by economists, in a unanimous decision by its policymakers. It gave a bullish assessment of the economy following its latest two-day meeting, describing a range of economic indicators as “strong”.The Fed was an early mover in beginning to pull back its post-crisis stimulus but it has been joined by other leading central banks: the European Central Bank is pencilling in an end to its quantitative easing programme at the end of the year, while the Bank of England is poised for another rate increase.The Bank of Japan stood as the exception this week, pledging to maintain extremely low rates, although it also jolted bond traders by introducing extra flexibility into its stimulus programme.In its post-meeting statement, the Fed described US activity growth as coming in at a “strong rate” and judged that household spending and investment had “grown strongly”. Job gains had also been “strong”, it said. “On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 per cent,” it said.The statement left the path open to a rate rise at the Fed’s next meeting on September 25-26, as officials stick to their longstanding guidance that further rate rises will come gradually. Investors are divided over how high rates will go and the path is likely to become less predictable as the increases continue into next year.Having raised rates twice, the Fed’s median forecast is for a total of four rises this year, with three in 2019. That could push rates towards “neutral” levels — at which growth is at its trend rate and inflation stable — as soon as next year. That would raise questions about how far into restrictive territory the Fed, led by chairman Jay Powell, wants to go. The Fed’s rate-raising exercise is becoming more politically contentious, with Donald Trump openly criticising the central bank’s tightening last month in a departure from presidential custom. Fed officials have been fretting about the risks to the economy posed by the White House’s decision to pursue trade conflicts on multiple fronts.