As expected, the U.S. Federal Open Market Committee decided today to keep its target for the federal funds rate unchanged at 1.75%.

In a statement, the Fed said the softening in economic demand has been prolonged by weak financial markets and uncertainty related to recent corporate accounting scandals.

Last week the market was rife with speculation that the Fed would move to cut rates at today’s meeting, with some pundits anticipating a cut of as much as 50 basis points. However, the lack of any hints in this direction from the Fed leading up to today’s meeting has since squashed much of that hope. Instead, traders were keying on any comments the Fed might make hinting at future rate moves.

In its statement, the Fed indicated that it may be prepared to cut rates if conditions show more weakness. It said, “The committee recognizes that, for the foreseeable future, against the background of its long run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness.”

Markets were more or less unchanged when the decision came down. Although they immediately sold off on the news, stocks have recovered.