The Federal Reserve kept its hands off interest rates at its March meeting, but left the door open for another round of interest rate hikes if the economy continues to grow.
The Fed held the federal funds rate steady at a range of 1.5 to 1.75 percent, and said it would take a “patient” approach as it monitors economic data before deciding to raise or lower rates.
The decision was widely expected by economists and investors, and the Fed reinforced its message that it is in no hurry to move again.
The economic outlook for the U.S. remains strong, with unemployment at its lowest level since 1969, and consumer and business confidence at high levels.
Inflation has been a problem, though, with the Personal Consumption Expenditure Index rising above 2 percent in December for the first time since 2012, stoking fears of an overheating economy and that the Fed may have to raise rates.
The central bank said it will continue to monitor economic data and review incoming information to determine “what future adjustments to the target range for the federal funds rate may be appropriate.”
The Fed also said it will continue to reinvest proceeds from maturing Treasury securities and mortgage backed securities.
The decision to leave rates unchanged means that borrowing costs for consumers and businesses will remain relatively low in the foreseeable future. That should help to support economic growth.
Overall, the Fed is still taking a cautious stance on rates and is likely to continue to do so until the economic data becomes clearer. This could mean more rate hikes if the economy continues to expand but also opens the door to potential cuts if signs of a slowdown appear.