The Federal Open Market Committee held the fed funds rate target at 0.5% to 0.75% at its most recent meeting, which ended Wednesday.
Having raised the target at its last meeting, it was widely expected the Fed would pause since monetary policy works with a lag.
The panel offered no hints as to when it will next increase the target.
Perhaps the largest change in the statement was "inflation will rise to 2 percent over the medium term," whereas in previous statements it said "expected to."
The labor market continued strengthening and economic activity has expanded at a moderate pace since the last FOMC meeting, according to the statement. Household spending rose but business fixed investment stayed "soft." But, it pointed out, "Measures of consumer and business sentiment have improved of late."
"Near-term risks to the economic outlook appear roughly balanced," the statement noted.
Monetary policy "remains accommodative, thereby supporting some further strengthening in
labor market conditions and a return to 2 percent inflation," the FOMC said. It still expects "gradual" rate hikes will be warranted.
The vote to hold rates was unanimous.
"With the labor market continuing to strengthen, the scene is set for a step up in the pace of normalization this year. The Fed has been emphasizing the fact that the US is at full employment more and more in the last couple of months - including in Janet Yellen's recent Stanford speech - making it harder for them to justify keeping rates so low," said Brian Coulton, chief economist at Fitch Ratings.
