Simply put
- The Federal Reserve left its benchmark interest rate unchanged for the third time this year as energy costs continue to rise due to the Middle East conflict.
- The Senate Banking Committee advanced Kevin Warsh’s nomination to head the U.S. central bank, preparing him for a final vote.
- Fed Chairman Jerome Powell’s eight-year term is set to end next month, but his successor remains uncertain.
The Federal Reserve continued to keep its benchmark interest rate unchanged on Wednesday, maintaining a cautious stance following the conclusion of what is widely expected to be Jerome Powell’s last FOMC meeting as chairman.
As the Middle East conflict threatens the global economy, the Federal Open Market Committee has kept the central bank’s benchmark interest rate unchanged in its target range of 3.5% to 3.75%, marking the third time this year that the committee has put the brakes on policy change.
“Developments in the Middle East contribute to high uncertainty about the economic outlook,” the Fed said in a statement.
The Fed’s decision on Wednesday was expected. Meanwhile, Bitcoin and Ethereum traded near $75,100 and $2,240, with both falling following announcements that losses would accelerate over the past day. CoinGecko. Bitcoin is down 1.4% and Ethereum is down 2.3% in the past 24 hours.
Earlier, the Senate Banking Committee nominated Kevin Warsh to replace Powell. Mr. Powell’s eight-year term as Fed director expires next month. The procedural vote sent Warsh’s nomination to the full Republican-controlled Senate.
Powell has said he intends to serve as “interim chair” if Warsh is not confirmed by May 15, aiming to maintain an orderly transition of leadership. Mr. Powell also said he may retain his position on the Fed’s board to ensure stability in the system.
Last week, the Department of Justice It’s finished It’s a criminal investigation against Powell. Sen. Thom Tillis (R-North Carolina) has vowed to block a vote on Warsh’s nomination until investigators resolve the case, which Tillis described as a “sham.”
Recent disclosures have revealed the assets held by Warsh, who has a net worth of $100 million. a lot of investment It is tied to the crypto sector such as Solana and Polymarket. Although he has described many crypto projects as fraudulent and worthless, he has expressed support for Bitcoin.
At the recent FOMC meeting, Fed Governor Stephen Milan called for a 25 basis point rate cut. The Fed’s previous interest rate decisions were also divisive, with Milan advocating lower rates. Three Fed board members supported the decision to leave the rate unchanged, but not the inclusion of language suggesting an easing bias.
Lower interest rates tend to benefit risky assets like stocks and cryptocurrencies, as borrowing becomes cheaper and liquidity increases. However, traders do not expect financial conditions to ease soon, with interest rates expected to remain stable until December, according to CME. fed watch.
U.S. energy costs are rising as ships continue to struggle to get through the Strait of Hormuz, through which 20% of the world’s oil passes, potentially complicating the Fed’s efforts to return inflation to its 2% target.
On Wednesday, the national average price for a gallon of gasoline was $4.22, an increase of 6.2% from last month. AAA. At the time of the U.S.-Israel-Iran war, the average price hovered around $2.99 per gallon.
