In line with market expectations, the US Federal Reserve kept its benchmark interest rate unchanged at 3.50%-3.75% on Wednesday, marking the fourth consecutive meeting without any adjustments, as officials carefully weigh the risks of persistent inflation 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 future adjustments to the target range for the federal funds rate.
Four members dissented from the rate decision, with one advocating for a rate cut and three pushing for a more hawkish stance. The decision had a limited impact on bitcoin, which remained around 0.5% lower over the past 24 hours, while US stocks experienced modest declines and yields rose.
This meeting is likely to be the last presided over by Jerome Powell, whose term ends on May 15, and his replacement, Kevin Warsh, is set to take over after clearing a Senate Banking Committee vote. The dissents suggest that Warsh may face challenges in implementing rate cuts. Market attention will now turn to Powell's post-meeting press conference for clues on the future direction of monetary policy.
Oil prices have rebounded to near post-war highs, posing a challenge for the US central bank as it balances its mandates on prices and economic growth.