As was widely expected, the U.S. Federal Reserve held its target policy rate range steady at this week’s meeting. While the Fed did announce a small change to the interest it pays on excess reserves, this was simply fine-tuning the transmission of monetary policy to broader money markets and the economy. Also as expected, the Fed made only limited changes to the FOMC (Federal Open Market Committee) statement to reflect changes in economic data.

With limited changes to the Fed statement and no change in rates, attention turned to Chairman Powell’s press conference to provide some detail on this week’s discussions. Ahead of the meeting, we expected the focus to be on two key areas: 1) the conditions under which it would be appropriate to cut or hike interest rates, and 2) the appropriate composition of securities holdings in the central bank’s System Open Market Account (SOMA).

We didn’t learn a great deal on either topic. Though Powell was asked about rate cuts several times, the chairman remained upbeat on the economic outlook, pointed to various transitory factors that have recently negatively affected core PCE inflation (personal consumption expenditures – the Fed’s preferred inflation measure), and reaffirmed his prior statements that the current stance of policy is appropriate. Separately, he said that persistently below-target inflation would be something that the Fed would take into account, but he wouldn’t provide concrete details on how the Fed would take it into account. Meanwhile, on the question of the composition of the balance sheet, he relayed the FOMC likely wouldn’t make a decision until later this year.

Overall, a quiet and unsurprising FOMC statement belies the important policy discussions and decisions ongoing at the Fed. Our view remains that absent a more material slowing in economic growth, there’s a high hurdle for any changes in the policy rate for the remainder of this year. But the central bank is concerned about persistently low inflation, and in the meetings ahead could provide additional clarity on the appropriate policy steps in the event that inflation remains persistently below their target.