The Fed also described its plans to wind down its $4.5 trillion balance sheet, which it expects to begin this year.
The Fed’s cautious, yet generally positive, economic statement follows a slew of weak data, including disappointing first quarter GDP, soft inflation numbers and less-than-expected payroll gains.
The Fed’s preferred measure of price inflation, the core Personal Consumption Expenditures index, fell to 1.5% year-over-year in April, its lowest level in months.
Another measure of inflation, the Consumer Price Index, dipped to 1.9% year-over-year in May.
The Fed’s expectations for GDP growth increased slightly to 2.2% in 2017, while forecasts for unemployment dropped across the board, with officials expecting the rate to hit 4.6% in the long-run.