The Federal Reserve left its benchmark federal funds rate range unchanged at 3.50% to 3.75% on Wednesday, a move that markets almost unanimously expected.
“Economic activity is growing at a healthy pace despite elevated uncertainty due in part to conflict in the Middle East,” the press release said. “Inflation remains elevated relative to the 2% target set by the Committee, partly reflecting supply shocks that have led to price increases in some sectors, including energy.”
“The Committee will guarantee price stability,” he adds.
Policymakers are increasingly inclined toward a rate hike this year, expecting the federal funds rate to reach 3.8% at the end of 2026, up from 3.4% in the March projection. Monetary policy easing won’t happen anytime soon, as they expect rates at 3.6% for 2027 and 3.4% in 2028, both higher than their previous forecasts.
They also forecast higher inflation, with personal consumption expenditures (PCE) up 3.6% this year and core PCE inflation at 3.3%, up from a forecast of 2.7% to 2.7% in March.
Trading around $66,000 earlier, Bitcoin fell to $64,800 within minutes of the decision and recently stabilized around $65,300. The S&P 500 and Nasdaq 100 both fell nearly 1%, erasing earlier gains.
