Before the meeting, the market had priced in a slightly more than 97 percent probability that the Fed would leave interest rates unchanged, according to the analysis firm CME FedWatch.
The New York Stock Exchange also did not react significantly to the news.
The Fed sees brighter economic conditions ahead.
"Available indicators suggest that economic activity has been rising at a steady pace. Employment growth has remained low and unemployment has shown some signs of stabilisation," the statement said after the meeting.
The Fed's decision came despite intense pressure and attacks from U.S. President Donald Trump, who wants to see more and deeper cuts. Federal Reserve Chair Jerome Powell has faced calls for impeachment, which he says are based on Trump's displeasure.
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