In line with market expectations, the US Federal Reserve maintained its benchmark fed funds rate range at 3.50%-3.75% on Wednesday, marking the fourth consecutive meeting with no changes, as officials balance persistent inflation risks with signs of a slowing economy. The Fed stated that it will carefully evaluate incoming data, the evolving outlook, and the balance of risks when considering further adjustments to the target range for the federal funds rate. Four dissents were recorded, with one dovish and three hawkish votes.
Fed Governor Stephen Mirran advocated for 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 about 0.5% lower over the past 24 hours, while US stocks experienced modest declines. 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 central bank 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 three 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 their post-war highs, with WTI crude trading just below $105 per barrel, posing a challenge for the US central bank as it weighs its mandates on prices and economic growth.