USA TODAY
Paul Davidson

WASHINGTON – The Federal Reserve held interest rates steady Wednesday but signaled it's prepared to cut them as soon as next month if the U.S. and China don't reach a détente in their escalating trade war and other risks continue to grow.

Policymakers also unexpectedly forecast lower rates by next year.

And while the Fed's median estimate isn't for a rate cut this year, nearly half of Fed policymakers expect at least one. Eight of the 17 voting Fed policymakers predict as much as a half-percentage-point decline in rates in 2019. Read more.