New Delhi, March 22 -- The Federal Reserve said on Wednesday that starting next month it will slow the pace of its balance sheet drawdown amid an ongoing impasse over lifting the government's borrowing limit, a shift that will likely hold for the remainder of the process.

The announcement came as part of a Federal Open Market Committee meeting that left the central bank's interest rate target unchanged, as officials deal with considerable uncertainty and a souring public mood around the economic outlook tied to aggressive and often chaotic policy changes by the Trump administration.

The shift on the balance sheet had been hinted at in the meeting minutes for the January FOMC meeting, released last month. Fed Governor Christopher Waller,...