*

Fed holds rates steady as expected, keeps 3 rate cuts in

sight

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Stocks gain steam after statement which raised growth

outlook

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Indexes up: Dow 0.33%, S&P 0.28%, Nasdaq 0.49%

(Updates prices at 2:12 p.m. ET/1812 GMT)

By Sinéad Carew and Bansari Mayur Kamdar

March 20 (Reuters) - Wall Street's main stock indexes

gained ground on Wednesday after the Federal Reserve said it was

keeping borrowing costs unchanged and indicated that it still

expects to cut rates by three-quarters of a percentage point by

the end of 2024.

However, the Fed's policy statement described inflation as

remaining "elevated," and it updated quarterly economic

projections to forecast growth of 2.1% for the year versus 1.4%

projected in December and an unemployment rate ending the year

at 4%, lower than the 4.1% anticipated in December.

Investors will look for more clues about the path for

interest rates in Chair Jerome Powell's press conference, due to

start at 2:30 p.m. EDT (1830 GMT).

"The market is relieved that the Fed is still projecting

three rate cuts this year. Recent too-hot inflation readings

have not derailed the Fed's plan so far," said Irene Tunkel,

chief U.S. equity strategist at BCA Research in Sarasota,

Florida.

"This is consistent with the baseline market expectations

and is only marginally positive for equities as this scenario is

fully priced in. This is a 'no-harm-done' outcome."

The indexes had rallied to record highs this month on

optimism around artificial intelligence, but had retreated

slightly in recent weeks after reports showing robust inflation

shook confidence that the Fed would start rate-easing soon.

At 2:12 p.m. EDT the Dow Jones Industrial Average

rose 127.22 points, or 0.33%, to 39,237.98, the S&P 500

gained 14.30 points, or 0.28%, to 5,192.81 and the Nasdaq

Composite gained 79.55 points, or 0.49%, to 16,246.35.

Seven of the 11 major S&P 500 sectors were advancing with

materials the biggest gainer, up 0.7% and healthcare

lagging most and last down 0.6%.