According to the eagerly awated Fed statement, "economic growth appears to have been moderate during the first half of this year, despite the ongoing adjustment in the housing sector. The economy seems likely to continue to expand at a moderate pace over coming quarters.
"Readings on core inflation have improved modestly in recent months," the statement added. "However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.
"In these circumstances," it added, "the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information."
Alfred Broaddus, former president of the Richmond Federal Reserve, told CNBC’s “Street Signs” that he believes the Fed recognized the progress that’s been made in reducing inflation.
“I think they were trying to do this cautiously because labor markets (are) tight,” Broaddus said. “…I think they wanted to be careful not to make too optimistic a statement about the long-run outlook for inflation.”