WASHINGTON, D.C. — The Federal Reserve voted to hold its key interest rate unchanged at 3.5% to 3.75%. Federal Reserve Chairman Jerome Powell said that future interest rate cuts will depend on whether inflation continues to fall.

The Federal Reserve has kept its key interest rate at 3.5% to 3.75% since December. Federal Reserve policymakers have adopted a cautious approach to interest rate adjustments with rising prices and mixed labor market signals.

A majority of Federal Reserve board members forecast at least one interest rate cut this year. Five Federal Reserve board members forecast that the key interest rate could fall below 3% this year.

Federal Reserve board members now expect inflation to end the year at 2.7%, up from their December prediction of 2.4%. "We just don't know what the effects of this will be and really no one does," Powell said.

He said that the next six weeks would be critical to understanding how the U.S. economy evolves. "That's balance but it does have a feel of downside risk," he said.

Federal Reserve board members forecast economic growth of 2.4% this year on average, compared to their December forecast of 2.3%. Board members forecast the unemployment rate will hold at 4.4%.

President Donald Trump has urged the Federal Reserve to reduce borrowing costs. The Federal Reserve typically lowers interest rates to boost the economy when it sees unemployment rising and typically raises interest rates when it is worried about inflation to ease spending and slow price rises.

Powell said that the administration's crackdown on immigration has slowed population growth and reduced the size of the workforce.

Powell's term as Federal Reserve chair is due to end in May. He said he would remain as chair until the president's nominee to replace him is confirmed.

Tariffs imposed by President Donald Trump's administration last year have been cited as potential causes of price rises. The conflict in Iran has contributed to an increase in oil prices.