Fed Meeting: Interest Rates Left Unchanged Amid Weak Jobs Data, Brexit Threat

The U.S. Federal Reserve released its latest policy statement Wednesday at the conclusion of a two-day meeting, opting to leave interest rates unchanged and indicating it would raise borrowing costs more slowly than earlier projected.

Fed Chair Janet Yellen had recently hinted at higher chances of a rate hike than the markets had priced in, but weak May jobs data and the economic repercussions of a possible Brexit have forced her to take a dovish stance.

“The dismal May jobs report and the angst over the possible Brexit keeps the Fed on the sidelines for now,” said Greg McBride, Bankrate.com’s chief financial analyst. “The Fed pointed to diminishing job gains but noted the strengthening of consumer spending and that economic growth appears to have picked up since the first quarter.”

The Federal Open Market Committee released its policy statement at 2 p.m. EDT. Yellen held a scheduled press conference shortly after at 2:30 p.m.

U.S. short-term interest rate futures contracts rose following the news. The price of futures contracts tied to the Fed's benchmark policy rate moves inversely to the rate that traders expect at any given point, and the rise suggests traders are no longer betting the Fed will raise interest rates even once by the end of the year.

Before the Fed ended its meeting Wednesday, traders saw a 21 percent chance of a rate hike in July, a 35 percent chance of a hike in September and a 51 percent chance of a hike in December.

"The Fed is trying to walk a fine line here," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Reuters contributed to this story.