Slower jobs growth and overseas hazards such as a possible UK exit from the EU prompted the Federal Reserve to keep rates unchanged, even as policymakers sought to leave the door open for further increases this year.
The US central bank held the target range for the federal funds rate at 0.25 per cent to 0.5 per cent, where it has been since the Fed lifted rates by a quarter point from near-zero levels in December, as it assesses a mixed set of economic indicators.
The median of Fed forecasts suggests policymakers are still expecting two interest-rate increases this year, but rate forecasts for 2017 and 2018 have been pared back, as has the Fed’s estimate of the longer-run policy rate. In a sign of greater caution on the committee, Esther George, the Kansas City Fed chief, dropped her previous dissenting call for higher rates.