The Federal Reserve on Wednesday maintained its benchmark rate range between 3.50 and 3.75%, as expected.
Down nearly 4% ahead of the expected decision following a surge in oil prices and poor inflation data earlier Wednesday, bitcoin remained sharply lower at $71,600 in the moments following the news.
US stocks remain lower for the day, with the Nasdaq and S&P 500 each down 0.55%. The 10-year Treasury yield remains a tenth higher at 4.21%.
“The implications of developments in the Middle East for the U.S. economy are uncertain,” the central bank said in its statement.
The vote to maintain monetary policy was 11-1, with Stephen Miran voting in favor of cutting rates by 25 basis points.
The Fed also updated its economic projections. Of particular note is a considerable rise in inflation expectations, now estimated at 2.7% for 2026, up from 2.4% previously. However, inflation is expected to fall to 2.2% in 2027 compared to 2.1% previously forecast.
The dot plot continues to show that a rate cut of 25 basis points is expected in 2026 and another in 2027.
The US central bank must balance what appears to be a slowing jobs market with inflation that remains well above its 2% target. Added to this is the March attack on Iran, which pushed the price of oil to nearly $100 a barrel, from less than $60 earlier this year.
Investors will now turn their attention to Federal Reserve Chairman Jerome Powell’s post-meeting press conference at 2:30 p.m. ET for further insight into the central bank’s outlook.
