The Federal Open Market Committee left the federal funds rate unchanged Wednesday and is now forecasting no rate hikes this year.
The committee will continue its more patient approach, Federal Reserve Chairman Jerome Powell said at a news conference following the two-day meeting. The committee held the target range for the federal funds rate at 2.25% to 2.5%.
"We feel our policy rate is in the range of neutral, the economy is growing at about trend, inflation is close to target, unemployment is under 3%," Mr. Powell said. "It's a great time for us to be patient, and watch and wait and see how things evolve."
FOMC members reduced the number of projected rate hikes in 2019 to zero from two. They now project, on average, that the federal funds rate will stay at 2.4% by the end of 2019 and rise to 2.6% by the end of 2020.
In December, after raising rates for the fourth time in 2018, they projected an increase to 2.9% by the end of 2019 and 3.1% by the end of 2020.
In determining the timing and size of future rate adjustments, the committee said it will assess realized and expected economic conditions relative to its maximum employment objective and its 2% inflation objective. "This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments," a committee statement said.
Mr. Powell pointed to slowing economies in Europe and China as headwinds to the U.S. economy. He also said the committee will continue to monitor risks, such as uncertainties surrounding Brexit and ongoing U.S. trade negotiations.
The FOMC also reduced its forecast for U.S. gross domestic product in 2019 to 2.1% from 2.3%, and in 2020 to 1.9% from 2%.
David Norris, head of U.S. credit at TwentyFour Asset Management, said rate adjustments could be on pause for a while. "I don't think you're going to see a rate hike, given their growth projections, well into 2020, if at all," Mr. Norris said. "(The December adjustment) could very well be the last rate hike for a while."