As with recent economic data, the Federal Open Market Committee’s assessment of conditions had something for both hawks and doves.

Officials slightly upgraded their assessment of the economy, saying “economic activity rose at a solid rate” while “the labor market remains strong.”

That characterization followed a report this week showing consumer spending rebounded in March following a lackluster start to the year. Previous data had pointed to the consumer as a weak spot in an otherwise solid first quarter.

The economy expanded at a 3.2 percent annualized pace from January to March, boosted by exports and inventories growth. The labor market remains robust, with unemployment at around a half- century low and wage gains near the best pace of this expansion.

Still, even with consumption intact and the labor market tightening, inflation has remained vexingly low. The Fed’s preferred price gauge climbed just 1.5 percent in March from a year earlier, well below the central bank’s 2 percent target.

In subtle changes from their last statement, officials said gauges for both overall and core inflation “have declined and are running below 2 percent.” That removed a line from March blaming energy prices for below-target price gains and removed a reference to core inflation being “near 2 percent.”

Inflation Fears
The Fed’s fears over low inflation have been mounting, with Powell recently calling it “one of the major challenges of our time.’’ That’s spurred some speculation that a further slowing in core price gains could prompt officials to cut rates even during a healthy expansion.

In a supplemental statement, officials adjusted a tool they use to keep the fed funds rate within its target range, lowering the interest paid on bank reserves deposited with the Fed to 2.35 percent from 2.4 percent.

This was the third such adjustment in a year for interest on excess reserves, or IOER. As in June and December, the step was taken after the rate banks pay to borrow overnight, known as the effective fed funds rate, drifted upward and threatened to reach the upper end of the target range.

The move “is intended to foster trading in the federal funds market at rates well within the FOMC’s target range,” the technical statement said.