US Fed leaves key rate unchanged amid mixed economic signals

The US Federal Reserve decided Wednesday to keep its benchmark interest rate unchanged amid mixed signals about the direction of the US economy.

But Fed Chair Jerome Powell seemed to tamp down growing expectations that officials might lean towards a rate cut, something President Donald Trump has demanded of the independent central bank.

After raising the key lending rate four times last year, the Fed voted unanimously to keep it in a range of 2.25-2.5 percent.

Conflicting economic data has complicated the Fed's decision-making. While the central bank noted the continued "strong labor market" and "solid" gains in economic activity, it also highlighted a slowdown in investment by businesses and households as well as weak inflation, which has fallen further below the Fed's two percent target to around 1.6 percent.

Asked whether there was a case building to cut rates to push the price measure closer to the target, Powell told reporters factors that "appear to be transient or idiosyncratic," such as apparel and airfares, likely are behind the low inflation rate, adding that central bankers are "comfortable" about policy at the moment.

"We think that our policy stance is appropriate at the moment. And we don't see a strong case for moving in either direction," he said, but added policymakers will be "watching inflation carefully."