WTI crude prices headed lower after jumping above $48 a barrel on Tuesday following the API report that showed U.S. inventories fell by a more-than-expected 4.16 million barrels at the end of last week.
Investors were awaiting Friday's monthly USA non-farm payrolls report for greater signs of the Fed's likely rate hike trajectory through the end of the year.
The 0.7% annual growth rate in the first three months of this year - down sharply from 2.1% in the fourth quarter of 2016 - was fueled by anemic consumer spending. "The labour market has continued to strengthen even as growth in economic activity slowed", the statement said, with "solid" job gains and another decline in the unemployment rate, which now sits at 4.5 per cent.
The Fed increased its interest rate in March and December by 25 basis points each time. Most economists expect it to do so again when it next meets in mid-June.
Gold prices nursed overnight losses in North American trade on Thursday, falling to the lowest level in around six weeks after the Federal Reserve left the door open to raising interest rates in June. The Fed held its benchmark rate near zero for seven years following the financial crisis to help boost the economy.
Any number above 50 indicates growth and April's figure marked the sharpest increase in business activity since December previous year and the ninth consecutive month of expansion for the sector.
The statement acknowledged the drop in the core PCE price index but the central bank retained their stance that inflation has been close 2% targets and is expected to reach the target over the medium term.
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Futures traders are now pricing in a 72 percent chance of a June rate hike, from 63 percent before the Fed's statement, according to the CME Group's FedWatch Tool. United States central bankers stuck to their outlook for gradual monetary-policy tightening after they left interest rates unchanged and showed no alarm over recent economic weakness.
The nation's total economic output, known as gross domestic product, expanded at its slowest pace in two years in the first quarter, the Commerce Department said last week.
Consumers and businesses are the most upbeat in year and early signs point to faster growth in the second quarter.
The FOMC members "have not changed their view that the economy can take a "gradual" increase in rates, which will be needed to prevent an overshoot of the inflation target as the labor market tightens", Sherpherdson said.
Almost eight years after the Great Recession ended, unemployment is at a low 4.5 per cent.
At its prior meeting in March, the Fed chose to make a decision on when to shrink the balance sheet by the end of the year, according to the minutes of the meeting.