The Federal Reserve on Wednesday left its benchmark federal funds rate range unchanged at 3.50%-3.75%, a move that markets were almost unanimously expecting.
“Economic activity is expanding at a solid pace despite elevated uncertainty due, in part, to the conflict in the Middle East,” the news release said. “Inflation remains elevated relative to the Committee’s 2 percent target, partly reflecting supply shocks that have driven price increases in certain sectors, including energy.”
“The Committee will guarantee price stability,” he added.
Policymakers are increasingly leaning toward a rate hike this year, expecting the federal funds rate to be 3.8% by the end of 2026, up from 3.4% in the March projection. A more flexible monetary policy will not come soon, as they expect rates of 3.6% in 2027 and 3.4% in 2028, both higher than their previous forecasts.
They also forecast higher inflation: personal consumption expenditure (PCE) will rise 3.6% this year and core PCE inflation will be 3.3%, compared to a forecast of 2.7%-2.7% in March.
Bitcoin was previously trading around $66,000 It fell to $64,800 in the minutes following the decision and recently stabilized around $65,300. The S&P 500 and Nasdaq 100 fell nearly 1%, erasing earlier gains.
