"The committee is comfortable with our current policy stance", he said. For now, "we don't see a strong case for moving [rates] in either direction", he said.
The federal funds rate is the amount banks charge each other for overnight loans, and is the rate the Fed targets as its main way of controlling other borrowing costs in the economy.
The Dow Jones Industrial Average fell 174.73 points, or 0.66%, to 26,255.41, the S&P 500 lost 11.56 points, or 0.40%, to 2,912.17 and the Nasdaq Composite dropped 30.83 points, or 0.38%, to 8,018.81.
Oil and metals markets added to the pressure on stocks on Thursday with traders sending copper to a 2-month low and using news of record USA oil production to cash in some of Brent crude's near 33 percent rise this year.
The two-year yield is higher on the day at 2.30 per cent, and the 10-year yield has popped back to around 2.50 per cent.
While the Fed's monetary policy remains on hold for now, declining annual inflation could make for lively discussions inside the central bank if it persists.
The Fed says said inflation was a factor in its decision to freeze rates where they are.
The change was initially read by many market participants as setting the stage for a rate cut later this year.
That Fed's statement also focused on the less stellar aspects of recent economic growth figures, noting that "growth of household spending and business fixed investment slowed in the first quarter".
After the officials last met in March, Mr. Powell signaled greater frustration that inflation had struggled to stay on target.
Readings above 50 indicate expansion, while lower numbers indicate contraction on the 100-point scale.
However, "we don't see any evidence at all of overheating", he noted.
But for now, the Fed chief said, low inflation allows the central bank to be "patient" in deciding on any further changes to its overnight benchmark lending rate, which it left in a range of 2.25 percent to 2.50 percent on Wednesday.
In a news conference on Wednesday, Powell once again was called on to defend the central bank's independence. This creates a risk that "inflation expectations over time could be pulled down", he added. This entailed a small cut in that rate to 2.35 per cent, in this hopes that this will counter an upward drift in the effective federal funds rate.
"We are a nonpolitical institution and that means we don't think about short term political considerations", Powell told reporters.
The energy index was down the most among the major S&P sectors, falling 1.71% and extending its recent slide.
He added that United States central bankers are "comfortable" about policy at the moment.
Still, even with consumption intact and the labor market tightening, inflation has remained vexingly low. "Are you willing to do that when the rest of the economy is humming along fine?" Standing pat was exactly what economists who cover the Fed were expecting. "It pushes out that day of reckoning".
The markets are not demanding the sort of steep rate cut the president is now demanding, and so unlike in December, the Fed is free to ignore what he wants.
Tuesday, Trump took to Twitter to pressure the Fed to cut interest rates by a full percentage point and return to the crisis-era bond-buying programme known as quantitative easing or QE. USA stocks fell after the Federal Reserve decision to leave rates unchanged.
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