Updated at 4:40 p.m. ET
The Federal Reserve left interest rates unchanged Wednesday but signaled it is ready to cut rates in the future if necessary to shore up a slowing U.S. economy.
The central bank's rate-setting committee said the economic outlook is still generally positive — with low unemployment and solid consumer spending. But trade tensions, a slowdown in manufacturing and sagging business investment have injected more uncertainty into the crystal ball.
"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 Fed said in a statement.
The central bank left the target range for the federal funds rate at 2.25% to 2.5%. That key rate affects a variety of consumer rates, including those for credit cards, auto loans and mortgages, as well as the interest paid to savers.
Policymakers have been getting mixed signals in recent weeks about the strength of the economy. A surprisingly weak jobs report — showing just 75,000 jobs added in May — was followed by better-than-expected numbers on retail sales.
While economic warning signs clearly got the Fed's attention, only one member of the rate-setting committee, St. Louis Fed President James Bullard, voted to cut rates immediately. The others opted to hold off, at least until the July meeting, in hopes a clearer picture might emerge by then.
"It's important," said Fed Chairman Jerome Powell in a news conference, "that monetary policy not overreact to any individual data point or short-term swing in sentiment. Doing so would risk adding even more uncertainty to the outlook."
Most forecasters were not expecting a rate cut at this week's meeting, and the stock market showed little reaction. But there was more suspense than usual. In addition to signs of an economic slowdown, the central bank has faced growing pressure to cut rates from the White House.
President Trump has repeatedly complained that the Fed slowed economic growth by raising rates last year. Bloomberg reported Tuesday that the president explored the idea of removing Powell — his own nominee — as Fed chairman earlier this year.
Powell did not address Trump's comments directly but made it clear he wants to safeguard the Fed from political meddling.
"I think the law is clear that I have a four-year term and I fully intend to serve it," Powell said.
House Speaker Nancy Pelosi told reporters the president should not interfere with the central bank's policymakers.
"The last thing we need is politics involved in setting interest rates," Pelosi said Wednesday at a breakfast sponsored by The Christian Science Monitor. "You would think that some Republicans would say, 'Mr. President, you shouldn't be doing that.' "
Since the Great Recession and its aftermath, the Fed has tried to be more transparent about its deliberations. New tools such as a "dot plot" help Fed leaders communicate their expectations. Nearly half the Fed officials contributing to the dot plot this week expect to see rates cut later this year.
Powell conceded that telegraphing such a cut — the first in more than a decade — might encourage some consumers to postpone big purchases while waiting for a lower interest rate.
"This is the first time, I believe, we've talked about cutting in the dot era," Powell said. "And you know, we're working our way through it."