Federal Reserve officials, seeing slower growth and softer inflation ahead, said Wednesday they don’t expect to hike interest rates much at all over the next three years.

The new median forecast of Fed officials in the “dot-plot” graph was for no more interest-rate hike this year. The central bankers see one move in 2020. The prior Fed forecast was for two rate hikes this year and then one more next year.

Policy makers also announced they will begin to taper the runoff of the $4 trillion balance sheet in May and end it in September.

The Fed said in a statement after its two-day meeting that it was holding its benchmark rate between 2.25% and 2.5%. Policy makers repeated they could be “patient” about what further “adjustments” to make to interest rates.

The Dow Jones Industrial Average DJIA, +0.12%^[1]  moved significantly off the day’s low after the decision. The yield on the 10-year note TMUBMUSD10Y, -3.15%^[2]   dropped sharply, and the dollar DXY, -0.50%^[3]  moved lower, all indicating traders taking a dovish interpretation to the decision.

Also see: Live blog and video of Fed decision and Powell press conference^[4]

Notable changes to the statement showed concern for the outlook for the first quarter. Fed officials said growth has slowed from its solid rate in the fourth quarter and said there were signs of slower growth in consumer and business spending. The statement noted that overall inflation had “declined,” while noting that core inflation, excluding food and energy prices, had remained near 2%.

Fed officials trimmed their growth forecast for 2019 to a 2.1% annual rate, down from 2.3% seen in December. The economy expanded at a 2.9% rate in 2018.

Fed officials also trimmed their forecast for headline inflation to 1.8% this year from the prior estimate of a 1.9% rate. They projected a slightly higher jobless rate as well.

The Fed’s latest statement and forecast complete a...