In line with market expectations, the US Federal Reserve has kept 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 weigh the risks of persistent inflation against signs of slowing economic growth, the Fed stated that it will carefully assess incoming data and the evolving outlook to determine the extent and timing of any future adjustments to the target range for the federal funds rate.
The decision was met with four dissents, including one dovish and three hawkish votes. Meanwhile, bitcoin prices remained under pressure, trading approximately 0.5% lower over the past 24 hours, while US stocks experienced modest declines. The two-year and 10-year Treasury yields increased by 9 and 5 basis points, respectively.
This meeting is likely to be the last chaired by Jerome Powell, whose term ends on May 15, and will be succeeded by Kevin Warsh, who has cleared a Senate Banking Committee vote. The three hawkish dissents may indicate challenges for Warsh in implementing rate cuts, if that is his desired direction. Market attention will now shift to Powell's post-meeting press conference for insights into the future 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 balances its mandates on prices and economic growth.