Federal Reserve officials continue to project near-zero interest rates at least through 2023, while upgrading their economic outlook to reflect greater optimism about the U.S. recovery from Covid-19.

"Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak," the Federal Open Market Committee (FOMC) said in its policy statement Wednesday. "Inflation continues to run below 2 percent."

Seven of 18 officials predicted higher interest rates by the end of 2023, compared with five of 17 at the December meeting, so a slightly larger group now see an earlier start to the withdrawal of ultra-easy monetary policy, according to the FOMC's quarterly economic projections, which were also issued Wednesday.