Officials will be looking for moderate growth, cooling inflation and supply and demand coming into better balance, particularly in the labor market, as they assess whether and when to raise rates again, Powell said.

“What our eyes are telling us is policy has not been restrictive enough for long enough to have its full desired effects,” he said. “We intend again to keep policy restrictive until we’re confident that inflation is coming down sustainably to our 2% target, and we’re prepared to further tighten if that is appropriate. And we think the process still probably has a long way to go.”

Eoin Treacy's view

The bond market continues to expect one more hike but nothing more than that. The fact the Fed’s own internal economists no longer expect a recession was welcome news for stock market investors even as the “long and variable lags” of monetary policy tightening have yet to be felt.