The U.S. Federal Reserve on Wednesday left its benchmark interest rates unchanged as the central bank waited on more data to assess the U.S. economic outlook.
"The Committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace," the Fed's policy-making committee said in a statement released after its two-day meeting.
The U.S. economy grew at an annual rate of 0.7 percent in the first quarter of this year, lower than the 2.1 percent growth in the previous quarter and the weakest performance in three years, the Commerce Department said Last week.
Consumer spending, which accounts for about 70 percent of the U.S. economy, increased only 0.3 percent in the first quarter, the smallest increase since the fourth quarter of 2009, according to the department.
But Fed played down the significance of weak consumer spending, saying "the fundamentals underpinning the continued growth of consumption remain solid."
The Fed also said the inflation measured on a 12-month basis "has been running close to" the central bank's target of 2 percent, as the unemployment rate has fallen to a level Fed officials see as consistent with full employment.
"Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments," the central bank said in the statement.
The statement suggested the Fed is keeping its options open for more rate hikes this year, maybe preparing for a move as soon as June. Fed officials have signaled that they expect two more rate hikes this year, in addition to the one increase they made in March.
Fed Vice Chair Stanley Fischer said last month that the central bank remained on track for two more rate increases this year despite the recent weak economic data.
"We're feeling that way and so far haven't seen anything to change that," Fischer said in an interview with CNBC, attributing much of the slowdown of the U.S. economy in the first quarter to seasonal factors that will go away as the year progresses.
Investors now placed a 94 percent chance of a rate hike at the Fed's June 13-14 meeting, up from roughly 70 percent ahead of the release of the Fed's statement, according to an analysis of Fed funds rate futures.
However, the Fed on Wednesday didn't signal any change to its balance sheet policy. Most Fed officials had anticipated that the central bank was likely to reduce its 4.5 trillion dollars of balance sheet later this year, if the economy continued to perform as expected, according to minutes of the Fed's last policy meeting in March.