Federal Reserve officials noted at their recent meeting that economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months. Officials noted that business fixed investment and net exports have been soft.

“The committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will continue to strengthen. However, global economic and financial developments continue to pose risks,” the FMOC said in a statement.

Against this backdrop, the committee decided to maintain the target range for the federal funds rate at 0.25% to 0.5%. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2% inflation.

The committee said it expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate. “The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” the committee said. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.