But if either inflation or inflation expectations edge too much lower, expect the dovish chatter to begin returning from some of the Fed's more influential quarters.

"The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal", the central bank said in a statement.

Federal Reserve policymakers on Wednesday held a key interest rate steady, downplaying recent weak economic data and indicating they remained on track for two more rate hikes this year. A slowdown by consumers was a major reason overall economic growth slowed so sharply over the winter.

USA jobless claims declined to 238,000 in the latest week from 257,000 previously and continuing claims fell to a fresh 17-year low which continued to suggest firm labour conditions with workers finding it easier to re-enter the labour market. Many think that annualized growth could accelerate to around 3 percent and that the Fed will feel more confident to resume raising rates at its June meeting. "All eyes now on the minutes from the meeting and jawboning from officials in the coming weeks".

Investors were awaiting Friday's monthly USA non-farm payrolls report for greater signs of the Fed's likely rate hike trajectory through the end of the year.

Gross domestic product in the first quarter of 2017 rose at a 0.7 percent annualized pace as weak consumer spending slowed the economy.

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However, another rate hike could be around the corner. He said, however, that a continuation of weak USA economic data could influence the Fed's economic outlook.

The weak consumer spending and subsiding inflation pressures did little to change expectations of a rate hike in June.

The statement that the Fed issued did express some misgivings that "economic activity slowed" as "household spending rose only modestly". At the time, the Fed had already cut its short-term rate to a record low.

In addition, Raymond James Financial Inc's chief economist Scott Brown notes, "Spending numbers were soft in February and March, but it's not necessarily the end of the world", since these figures come after such a strong fourth quarter. The global economic picture has also brightened somewhat. Only June, September and December include a press conference with Yellen.

The Fed's decision has prompted an increase in odds of a rate hike in June, with Oxford Economics head of USA macro investor services Kathy Bostjancic telling Market Watch that the probability of a rate hike in June has risen to 90% from a previous 70%.

The central bank is scheduled to release its policy decision at 2 p.m. EDT (1800 GMT) on Wednesday at the conclusion of its two-day meeting.


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