Getty ImagesThe US central bank has kept interest rates unchanged for the second time in a row, despite warning that uncertainty about the path ahead for the economy had increased.
The decision, which was widely expected, left the Federal Reserve’s benchmark interest rate hovering around 4.3%, where it has stood since December.
Forecasts released by the bank also showed policymakers expect weaker growth this year than they did just a few months ago.
Fed chairman Jerome Powell has previously said he saw little risk to taking a patient approach, while waiting for more certainty about how policies unveiled by US President Donald Trump will affect the economy.
Since taking office in January, Trump has announced blitz of new tariffs while also calling for big cuts to taxes, regulation, and government spending.
Economists have warned that some of those policies could cause prices to rise, at least in the short-term, and raise uncertainty for businesses.
Analysts say the concerns have also helped to drive a sell-off in the stock market, with the S&P 500 falling 10% from February back to levels last seen in September.
The dynamic has raised the challenge for the Fed, which has spent much of the last three years trying to keep prices stable and avoid economic downturn.
The Fed hiked borrowing costs significantly starting in 2022, aiming to cool the economy and ease the pressures pushing up prices.
Inflation, the rate of price increases, has since fallen to 2.8% as of February, but remains above the bank’s 2% target.
Recent surveys also suggest that public expectations for inflation have risen, which could make the bank’s job stabilising prices more difficult.
Households expecting prices to rise have incentive to buy now. But that can fuel inflation, as firms respond to the increased demand by raising prices further.