In line with market expectations, the US Federal Reserve maintained its benchmark federal funds rate at 3.50%-3.75% on Wednesday, marking the fourth consecutive meeting without a change, as officials balance persistent inflation concerns against signs of a slowing economy. The Fed stated that it will carefully assess incoming data, the evolving outlook, and the balance of risks when considering further adjustments to the federal funds rate target range.
The decision saw four dissents, with one dovish and three hawkish votes. Meanwhile, bitcoin prices remained relatively stable, US stocks experienced modest declines, and yields rose, with the two-year Treasury increasing by 9 basis points to 3.93% and the 10-year Treasury rising by 5 basis points to 4.40%. This meeting is likely to be the last presided over by Jerome Powell, whose term as chairman ends on May 15, and will be replaced by Kevin Warsh, who passed a Senate Banking Committee vote earlier on Wednesday.
The hawkish dissents suggest that Warsh may face challenges in implementing rate cuts. Market attention will now focus on Powell's post-meeting press conference for clues on the future direction of monetary policy. Oil prices have rebounded to near post-war highs, with WTI crude trading just below $105 per barrel, posing a challenge for the US central bank as it tries to balance its mandates on prices and economic growth.