Fed signals no rush to hike rates as economy hits soft patch

Washington: The Federal Reserve left interest rates unchanged on Wednesday, but kept the door open to a hike in June while showing little sign it was in a hurry to tighten monetary policy amid an apparent slowdown in the U.S. economy.In a statement that largely mirrored the one issued after its last policy meeting in March, the U.S. central bank's rate-setting committee described an improving labour market but acknowledged that economic growth seemed to have slowed.[caption id="attachment_2400582" align="alignleft" width="380"] US Federal Reseve building[/caption]It also said it was closely watching inflation and noted that global economic headwinds remained on its radar, though it made no mention of the risks they posed, as it had last month."The committee continues to closely monitor inflation indicators and global economic and financial developments," the Fed said following a two-day meeting.Prices for U.S. equities edged up after the announcement, while the dollar .DXY was little changed against a basket of currencies. Prices for longer-dated U.S. Treasuries rallied.Traders kept their bets that the first rate hike of 2016 would come in September and gave less-than-even odds of a follow-up hike by December. Fed policymakers in March forecast two hikes this year.Investors currently see a 23 percent probability that the Fed's overnight lending rate will rise in June, up from 21 percent prior to the decision, according to CME's FedWatch group."This latest statement has not laid out a strong position for a June rate hike," said Bill Irving, a portfolio manager with Fidelity Investments.The Fed kept the target range for its overnight lending rate in a range of 0.25 percent to 0.50 percent, in line with expectations in a Reuters poll. The central bank raised rates in December for the first time in nearly a decade.The Fed, which has tried to move away from issuing forward guidance since embarking on a rate hike path it has described as gradual, made no mention of how it viewed the balance of risks to the economic outlook. It was the third straight policy statement in which policymakers had kept mum on that detail.