Janet Yellen
Janet Yellen, chairman of the US Federal Reserve, speaks at a press conference following a Federal Open Market Committee meeting in Washington on 18 March 2015.Reuters/Joshua Roberts

The U.S. Federal Reserve kept interest rates unchanged on Wednesday and signaled it still planned to raise rates twice in 2016, though it said slower economic growth would crimp the pace of monetary policy tightening in future years.

The central bank's decision to stick with its 2016 rate path, however, appeared shakier, with six of its 17 policymakers projecting just one increase this year. Only one Fed policymaker had done so when economic forecasts were last issued in March.

A sharp slowdown in U.S. hiring in May had fuelled doubts about the strength of the labor market going into the Fed's two-day policy meeting. Fed Chair Janet Yellen acknowledged the need to see clear signs of economic strength before lifting rates.

"We do need to make sure that there's sufficient momentum," Yellen told a news conference.

The Fed also said the economy would grow only 2 percent this year and in 2017, 0.1 percentage point lower than previously forecast for each year.

It also cut its longer-term view of the appropriate federal funds rate, its benchmark lending rate, by a quarter point to 3 percent and indicated it would be less aggressive in raising rates after the end of this year.

Yellen was not clear on whether a rate increase could come at the next policy meeting in late July or whether the central bank would wait for a slew of firmer data as it headed into its September meeting.