Federal Reserve officials voted Wednesday to hold interest rates steady at least until next month, while signaling that U.S. economic growth is sufficient to warrant future gradual increases in borrowing costs.

The central bank's Federal Open Market Committee, led by Chairman Jerome Powell, said in a statement following a two-day meeting in Washington that the rate would stay in a range of 1.75% to 2%. The Fed has been raising rates since late 2015 in a bid to head off runaway wages and inflation as the economy strengthens, especially with unemployment close to an 18-year low.

The Dow Jones Industrial Average fell as much as 120 points after the release amid concerns of further rate hikes

"The Fed has shifted from 'solid' to 'strong' in its description of growth and is increasingly emphasizing the tightness of the labor market by describing unemployment as 'low.' The strength of GDP in Q2 and in particular the rebound in consumption is likely to embolden them further to continue hiking rates. The justification for keeping policy rates below neutral has evaporated," said Brian Coulton, chief economist at Fitch.

President Donald Trump's December tax cuts helped push growth to an annualized pace of 4.1% in the second quarter, though his threatened tariffs against China has sparked concerns that a global trade war could hamper the economy, prompting many businesses to delay plans for new plants, equipment and other investment, economists say.      

After years of stubbornly low inflation, price increases have accelerated and are now close to the Fed's target of 2% annually. Bank of America economists predict the Fed will raise interest rates at a meeting in September and at least once more before the end of the year.    

Trump told CNBC in a July 20 interview that he was "not happy" about rising interest rates, which tend to put a damper on economic growth. It was a remarkable departure from a tradition of U.S. presidents avoiding commenting directly on the Fed's monetary policy, out of respect for the central bank's independence.

"I'm not thrilled because we go up and every time you go up, they want to raise rates again," Trump said.

More from Markets

Stocks Tumble, Dow Futures Plunge as Growth Risks Catch Up to Global Markets

Stocks Tumble, Dow Futures Plunge as Growth Risks Catch Up to Global Markets

Market of the Week: E-mini S&P 500

Market of the Week: E-mini S&P 500

Bristol-Myers Slides After FDA Delays Marketing Approval for Cancer Therapy

Bristol-Myers Slides After FDA Delays Marketing Approval for Cancer Therapy

Dow Trades Lower After Momentum From China Rally Fades, Nasdaq Rises

Dow Trades Lower After Momentum From China Rally Fades, Nasdaq Rises

Goldman Women Find Bias in Pay as Corporate Old-Boy Clubs Endure

Goldman Women Find Bias in Pay as Corporate Old-Boy Clubs Endure