Fed holds rates, says US economy has slowed

As widely expected, the US Federal Reserve left interest rates unchanged on Wednesday, citing weaker economic activity.

"Growth in household spending has moderated, although households' real income has risen at a solid rate and consumer sentiment remains high," the Federal Open Market Committee said in a statement after holding the benchmark rate at a 0.25%-0.50 range.

"The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2% inflation."

Eight members of the FOMC voted to maintain the target range, while Esther George of the Kansas City Fed dissented, advocating for a 0.5%-0.75% range.

The FOMC added that it 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."

The next FOMC meeting is June 14-15.