Federal Reserve seemed optimistic over the economy, as it retained interest rates on hold in its first sitting since the new US president took over.

The US central bank unanimously sustained its benchmark interest rate in a range of 0.5% to 0.75%. It also said that both the jobs market and economic activity had persistently strengthened in the period.

“Measures of consumer and business sentiment have improved of late,” the central bank also said in a statement.

The Fed had increased its benchmark interest rate by 0.25% in December, which was only the second rise in a decade.

Meanwhile President Trump has vowed to bolster growth through tax cuts, spending and deregulation, raising the prospect of higher inflation.

In January Fed chairwoman Janet Yellen issued a warning that, with the economy near full employment, the central bank risked a “nasty surprise” on inflation if it was too sluggish with rate increases.

However the Fed said on Wednesday that inflation “will rise to 2% over the medium term”, but did not comment on the effect of the Trump administration’s plans.

Despite being positive, the central bank also indicated the Federal Open Markets Committee (FOMC), the body which sets rates, would still only make “gradual increases”.

Fed did not give any information on when the body plans to raise rates in future. Especially in the time when investors are keen for guidance on when the next rise would be and how many were planned for this year.

“This is only the first FOMC meeting of eight in 2017 so there are still plenty of opportunities for the Fed to raise interest rates throughout the year and it is likely that we will see a rate rise in March or June,” said Kully Samra, UK managing director of wealth management firm Charles Schwab.