Editor’s note: This story has been updated with additional details.

The Federal Reserve opted to keep the federal funds rate unchanged at 5.25% to 5.5% Wednesday, as widely expected, reinforcing its commitment to steering the economy toward sustainable growth and controlling inflation.

Regarding the latest inflation dynamics, the Fed stated that "In recent months, there has been a lack of further progress toward the Committee's 2 percent inflation objective."

Furthermore, it noted that “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”

The Fed said it does not expect it will be appropriate to cut rates until it has gained greater confidence inflation is moving sustainably toward 2%.

The Federal Open Market Committee has outlined a plan to gradually reduce its holdings of Treasury securities and agency debt, marking a shift toward normalizing its balance sheet.

Starting in June, the Fed will reduce the monthly redemption cap on Treasury securities from $60 billion to $25 billion while maintaining the cap on agency debt and mortgage-backed securities at $35 billion.

This represents a slower-than-expected pace of reduction in so-called quantitative tightening, as markets participants expected the Fed to shift from $60 billion to $30 billion in its monthly redemption cap on Treasury securities.

Wednesday’s Fed statement indicates that risks to achieving employment and inflation goals ‘have moved toward a better balance over the last year,’ as opposed to the phrasing “are moving into better balance” in the March policy statement.

Market The U.S. dollar index (DXY), as tracked by the Invesco DB USD Index Bullish Fund ETF , inched lower minutes after the statement release. Treasury yields inched lower across the board.

Stocks positively reacted, with the SPDR S&P 500 ETF Trust ( SPY ) shifting from earlier losses to gains, up 0.2% for the day.

Traders now await Fed Chair Jerome Powell‘s remarks due at 2:30 p.m. ET.

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Federal Reserve illustration created using artificial intelligence via MidJourney.