Federal Reserve officials expect inflation to worsen in the coming months but they still foresee two interest rate cuts by the end of this year, the same as they projected in March.

The close split at the U.S. Federal Reserve over whether to keep hedging against inflation risks or move forward faster with rate cuts came through on Friday in the first public comments from policymakers following a decision this week to hold borrowing costs steady for now.

In an updated forecast, Fed officials now see core PCE inflation jumping to 3.1% by the end of the year from the current 2.5% rate in April. This is much higher than the 2.8% core rate forecast in March.