The U.S. Federal Reserve maintained its benchmark interest rate at 3.50%-3.75% as anticipated, marking the fourth consecutive meeting without a change, as officials balance persistent inflation concerns with 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.
Four dissents were noted, with one dovish and three hawkish, as Fed Governor Stephen Mirran proposed a 25 basis point rate cut, while Beth Hammack, Neel Kashkari, and Lorie Logan preferred to maintain rates while removing easing bias. Bitcoin and U.S. stocks experienced modest declines, while yields rose, with the two-year Treasury increasing 9 basis points to 3.93% and the 10-year up 5 basis points to 4.40%.
Today's meeting is likely the last to be chaired by Jerome Powell, whose term ends on May 15, and will be succeeded by Kevin Warsh, who passed a Senate Banking Committee vote earlier in the day. Traders are now focused on Powell's post-meeting press conference for clues on the future direction 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 U.S. central bank as it weighs the impact of higher energy costs on inflation and economic growth.