Gains were also limited by a reluctance to push up the dollar in advance of a meeting today of the Federal Reserve's rate-setting committee.

At its most recent meeting, on Nov. 15, the Fed's rate-setting committee said it continued to view inflation as a greater threat than a sharp slowdown.

But the Federal Reserve's top rate-setting committee made only a small reduction, reflecting its confidence that any downturn would be brief and mild.

But whether the Federal Reserve's rate-setting committee will be able to stick to its self-described "measured" pace is an open question.

The Fed's rate-setting committee will next meet on June 28 and 29.

The Federal Reserve's top rate-setting committee also lowered the discount rate, which it charges on its own loans to banks, to 5 percent from 5.25 percent.

The Federal Reserve, whose rate-setting committee meets next week, is expected to continue raising its benchmark short-term interest rate over the next year or longer.

The Fed's rate-setting committee will consider reductions at a meeting starting on Tuesday.

The Fed's rate-setting committee voted 9 to 1 to leave the federal funds rate, the interest banks charge on overnight loans, at 5.25 percent.

But the Fed's rate-setting committee also tweaked the language in its public statement after the meeting to note that economic growth had picked up.