In line with market expectations, the US Federal Reserve opted to keep its benchmark federal funds rate unchanged at 3.50%-3.75% on Wednesday, marking the fourth consecutive meeting without a rate adjustment, as officials balance the risks of persistent inflation against signs of slowing economic growth. The Fed stated that it will carefully evaluate incoming data, the evolving outlook, and the balance of risks when considering future adjustments to the federal funds rate target range.
The rate decision saw four dissents, with one member advocating for a rate cut and three pushing for a removal of easing bias. Meanwhile, bitcoin prices remained under pressure, declining by approximately 0.5% over the past 24 hours, while US stocks experienced modest declines and 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%. With Jerome Powell's term as chairman ending on May 15, attention is shifting to his post-meeting press conference, where traders will seek guidance on the future direction of monetary policy.
The recent rebound in oil prices, with WTI crude nearing $105 per barrel, poses a challenge for the US central bank, as higher energy costs can contribute to inflation while also slowing economic activity, forcing the bank to prioritize between its dual mandates of price stability and economic growth.