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. The decision reflects the central bank's cautious approach in balancing persistent inflation risks with signs of slowing economic growth. The Federal Reserve stated that it will carefully evaluate incoming data, the evolving outlook, and the balance of risks when considering future adjustments to the target range for the federal funds rate. The meeting saw four dissenting votes, with one member advocating for a rate cut and three pushing for a removal of easing bias.
The decision had a moderate impact on financial markets, with bitcoin and US stocks experiencing modest declines. The focus now shifts to the upcoming leadership transition, as Jerome Powell's term as chairman ends on May 15, and Kevin Warsh is poised to take over. The path forward for monetary policy remains uncertain, with the new chairman facing challenges in implementing rate cuts. Meanwhile, oil prices have rebounded to near their post-war highs, posing a challenge for the central bank in balancing its mandates on prices and economic growth.