The Federal Reserve held the benchmark federal funds rate range steady at 3.50%-3.75% on Wednesday, as expected.
Down nearly 4% pre-decision following a surge in oil prices and poor inflation data earlier on Wednesday, bitcoin remained sharply lower at $71,600 in the moments following the news.
US stocks remain lower on the day, with the Nasdaq and S&P 500 each falling 0.55%. The 10-year Treasury yield remains slightly higher at 4.21%.
“The implications of events in the Middle East for the U.S. economy are uncertain,” the central bank said in its accompanying statement.
The vote to keep policy steady was 11 to 1, with Stephen Miran voting to cut rates by 25 basis points.
The Fed also updated its economic projections. Of particular interest was a considerable increase in inflation expectations, which are now estimated at 2.7% by 2026, up from 2.4% previously. However, inflation is expected to fall to 2.2% in 2027, down from 2.1% previously projected.
The so-called “dot plot” continues to show expectations for a 25 basis point rate cut in 2026 and a further one in 2027.
The US central bank must balance what appears to be a labor market slowdown with inflation that remains well above its 2% target. Added to this is the March attack on Iran, which has raised the price of oil to almost $100 per barrel, up from less than $60 earlier this year.
Investors will now turn their attention to Federal Reserve Chair Jerome Powell’s post-meeting press conference at 2:30 p.m. ET for more information on the central bank’s outlook.
