The Federal Reserve announced on Thursday that the federal funds rate will stay unchanged considering the weak global economy and low inflation.
"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the Fed said in its policy statement. It added the risks to the U.S. economy remained nearly balanced but that it was "monitoring developments abroad."
Fresh economic projections showed 13 of 17 Fed policymakers still foresee raising rates at least once in 2015, down from 15 at the last meeting in June. Four policymakers now believe rates should not be raised until at least 2016, compared to two who felt that way in June.
The Fed has policy meetings in October and December.
In deciding when to hike rates, the Fed repeated that it wanted to see "some further improvement in the labor market," and be "reasonably confident" that inflation will increase.
Taken as a whole, the latest Fed projections of slower GDP growth, low unemployment and still low inflation suggest that concerns of a so-called secular stagnation may be taking root among Fed policymakers. One policymaker even suggested a negative federal funds rate.
Policymakers also forecast inflation to creep only slowly toward the Fed's 2 percent target even as unemployment dips lower than previously expected. They now expect the unemployment rate to hit 4.8 percent next year, remaining at that level for as long as three years.
The Fed's projected path of interest rates shifted downward, with the long-run federal funds rate now seen at 3.5 percent, compared to 3.75 percent at the last policy meeting.
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