The Federal Reserve left its benchmark short-term interest rate unchanged, shrugging off pressure from President Donald Trump to loosen monetary policy immediately.

Yet Fed Chairman Jerome Powell noted that the U.S. economic outlook is increasingly uncertain, citing trade tensions and slowing global growth.

Nearly half of the members of the Fed's rate-setting body see a rate cut this year, the bank indicated.



The central bank forecasts economic growth of 2.1% this year, which would be a significant drop from 2.9% in 2018.

The Federal Reserve is holding its benchmark interest rate steady, although policymakers indicate a willingness to loosen the monetary reins if U.S. economic growth sags.

While the economy remains strong, "uncertainties about this outlook have increased," the Fed's rate-setting body said in a statement released Wednesday afternoon after two days of deliberations. "In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion."

The current Federal funds rate is set in a range between 2.25% and 2.5%. When the Fed adjusts that rate, it changes the private borrowing costs for everything from mortgages and credit cards to home equity lines of credit. Lowering the rate can help stimulate the economy as well as increase inflation, which remains shy of the Fed's target of 2% a year.

The Fed expects the economy to expand 2.1% this year, a forecast that remains unchanged since its March meeting and is well short of the 2.9% rate of growth seen in 2018. It expects inflation to drift even lower by the end of the year, with core inflation at 1.8%, down from its level of 2% in May.

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One important sign that policymakers are ready to give the economy some gas: The Fed is no longer saying it will be "patient" in adjusting rates, dropping a favorite word that markets took to mean that interest rates would stay flat. Instead, officials said they will "act as appropriate to sustain the expansion."

Trade wars and slowing global growth are the main issues concerning the Fed these days, Chairman Jerome Powell said in a press conference Wednesday afternoon. "News on trade has been an important driver of uncertainty," he said, "but we are also looking at global growth."

Powell: "I intend to serve"

Powell noted that several members of the Fed's rate-setting committee wanted to cut rates this month, but the majority preferred a wait-and-see approach. Earlier this month, he said the Fed is open to lowering interest rates to counter any damage from the U.S.' trade war with China.

"It is clear that any notion of policy normalization has ended and the central bank is setting up to lower rates this year," Joseph Brusuelas, chief U.S. economist at RSM, said in a note.

President Donald Trump has been clamoring for the Fed to lower interest rates, and has reportedly considered firing or even demoting Powell.

Asked Wednesday what he would do if the president called for his ouster, Powell replied: "I think the law is clear that I have a full four-year term and I intend to serve it."