In line with market expectations, the US Federal Reserve kept its benchmark interest rate steady at 3.50%-3.75% on Wednesday, marking the fourth consecutive meeting without a change, as officials continue to weigh the risks of persistent inflation against signs of a slowing economy. 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 members dissented from the rate decision, with one advocating for a rate cut and three pushing for a more hawkish stance. The news put pressure on bitcoin, which remained about 0.5% lower over the past 24 hours, while US stocks saw modest declines and yields rose.
Today's meeting is likely to be the last chaired by Jerome Powell, whose term ends on May 15, and will be replaced by Kevin Warsh, who cleared a Senate Banking Committee vote earlier on Wednesday. The three hawkish dissents indicate that Warsh may face challenges in implementing rate cuts, even if that is his preferred direction. Market attention will now turn to Powell's post-meeting press conference for clues on the future of monetary policy.
Oil prices have rebounded to near their post-war highs, with WTI crude trading just shy of $105 per barrel, posing a challenge for the US central bank as it balances its mandates on prices and economic growth.