In line with market expectations, the US Federal Reserve kept its benchmark interest rate range unchanged at 3.50%-3.75% on Wednesday, marking the fourth consecutive meeting without a change, as officials balance persistent inflation concerns against signs of slowing economic growth. 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 rate decision was met with four dissents, including one dovish and three hawkish votes. Fed Governor Stephen Mirran favored a 25 basis point rate cut, while Beth Hammack, Neel Kashkari, and Lorie Logan preferred to maintain rates while removing any easing bias. Bitcoin prices remained under pressure, trading approximately 0.5% lower over the past 24 hours, just below $76,000.
US stocks experienced modest declines, with the Nasdaq down 0.35%. Yields rose, with the two-year Treasury up 9 basis points to 3.93% and the 10-year up 5 basis points to 4.40%. Today's central bank meeting is likely to be Jerome Powell's last as chairman, with his term ending on May 15.
His successor, Kevin Warsh, who passed a Senate Banking Committee vote earlier on Wednesday, is expected to take over, but may face challenges in implementing rate cuts due to the three hawkish dissents. Traders are now awaiting 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, after pulling back earlier this month amid hopes for a lasting peace between the US and Iran. The rise in energy costs contributes to higher headline inflation but can also slow economic activity, putting the US central bank in a difficult position: prioritizing price stability or economic growth.