The federal funds rate remains in the 4.25-to-4.5% range. But the central bank's latest outlook spells out a stagflationary environment resulting from the import duties, with inflation heading higher even as overall growth trends lower.

Powell said uncertainty about Trump's tariffs, apprehension about their economic impact, the good job market, and the Fed's forward-looking forecasts have all played roles in the decisions to keep rates steady.

Federal Reserve Board - Federal Reserve Board and Federal Open Market Committee release economic projections from the June 17-18 FOMC meeting.