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 target range for the federal funds rate. There were four dissents to the rate decision, with one dove and three hawks. 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.
Prior to the announcement, bitcoin prices remained under pressure, down approximately 0.5% over the past 24 hours, trading 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 cleared a Senate Banking Committee vote earlier on Wednesday, is expected to face challenges in implementing rate cuts, if that is his preferred direction. Market attention will now shift to Powell's post-meeting press conference, where traders will seek clues on the future direction of monetary policy. After a sharp decline earlier this month, oil prices have rebounded to near their post-war highs, with WTI crude trading just shy of $105 per barrel. Higher energy costs contribute to increased inflation, but can also slow economic activity, putting the US central bank in a difficult position: should it prioritize price stability or economic growth?