In line with market expectations, the US Federal Reserve decided to keep its benchmark interest rate unchanged at 3.50%-3.75% during its latest meeting, marking the fourth consecutive meeting without any adjustments, as officials continue to balance persistent inflation risks with signs of slowing economic growth. The Fed stated that it would carefully assess incoming data, the evolving outlook, and the balance of risks when considering further adjustments to the target range for the federal funds rate. The meeting saw four dissents to the rate decision, with one dovish and three hawkish votes. Meanwhile, the price of bitcoin remained under pressure, trading about 0.5% lower over the past 24 hours, while US stocks experienced modest declines and yields increased.
This meeting is likely to be the last one presided over by Jerome Powell, whose term as chairman ends on May 15, and his replacement, Kevin Warsh, is set to take over after passing a Senate Banking Committee vote. The three hawkish dissents indicate that Warsh may face challenges in implementing rate cuts, even if that is his preferred direction. Market attention will now focus on Powell's post-meeting press conference for clues on the future of monetary policy. Oil prices have rebounded to near their post-war highs, with WTI crude trading just below $105 per barrel, posing a challenge for the US central bank as it must decide which of its mandates - prices or economic growth - to prioritize.