As markets well expected, the U.S. Federal Reserve on Wednesday kept its federal funds rate range unchanged at 3.50-3.75%, the fourth straight meeting with no changes as officials weigh continued inflation risks against signs of slowing economic growth.
“In considering the scope and timing of further adjustments to the target range for the federal funds rate, the Committee will carefully evaluate available data, developments in the outlook, and the balance of risks,” the Fed said in its policy statement.
There were four people who opposed the interest rate decision, one person was dovish and three were hawkish. Fed President Stephen Millaran wanted to cut interest rates by 25 basis points, while Beth Hammack, Neal Kashkari and Rory Logan wanted to keep rates on hold but eliminate the easing bias.
Under pressure ahead of the news, Bitcoin fell about 0.5% over the past 24 hours, trading just below $96,000. US stocks continued to decline slightly, with the Nasdaq down 0.35%.
Today’s central bank meeting is likely to be the last one chaired by Chairman Jerome Powell, whose term ends on May 15. His successor, Kevin Warsh, passed a vote by the Senate Banking Committee early Wednesday, putting him on track to succeed Powell once he steps down.
All eyes will now turn to Chairman Powell’s post-meeting press conference as traders look for clues about the future direction of monetary policy.
After falling sharply earlier this month on hopes for lasting peace between the United States and Iran, oil prices have rebounded to near post-war highs, with WTI crude trading at just under $105 a barrel.
Rising energy costs naturally feed into headline inflation rates, but they can also slow economic activity. This puts the US central bank in a difficult position. Which should be given priority: prices or economic growth, which is the responsibility of the government?
