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The Federal Reserve on Wednesday pointed to weakness in the US labour market and economy, in a sign that the central bank is struggling to proceed with its plans to raise interest rates this year.
The Fed's policy statement puts it on track to begin a meeting-by-meeting approach toward deciding when to pull the trigger on its first rate hike since June 2006.
The central bank, however, acknowledged soft patches across the economy, making it more likely that it will not be ready to hike rates until at least September.
"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labour market and is reasonably confident that inflation will move back to its 2 per cent objective over the medium term," the Fed said in its statement, following a two-day meeting of its policy-setting committee.
The Fed's rate guidance mirrored what it gave last month. But unlike its March policy statement, this time the central bank did not effectively rule out hiking rates at its next meeting.
While that makes a June move possible, the economic data is not cooperating.
The economy grew at an anaemic 0.2 per cent annual rate in the first quarter, the Commerce Department reported early on Wednesday, well below economists' expectations for 1 per cent growth and the fourth quarter's 2.2 per cent expansion.
The Fed acknowledged that economic growth "had slowed during the winter months, in part reflecting transitory factors." In March, the Fed described growth as having moderated somewhat.
Economists see September as the more likely time for a rate hike, while investors see an even later time horizon, with futures contracts pointing more toward December.
The central bank will have at least two months of economic data to consider before its next policy-setting meeting in June, when it also issues new economic projections and conducts a press conference with Fed Chair Janet Yellen.
There were no dissents at the meeting.
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