The U.S. Federal Reserve keeps its benchmark interest rate unchanged at the 3.5%–3.75% range at its first policy meeting under Chair Kevin Warsh. The decision is unanimous and extends the central bank’s pause for a fourth consecutive meeting, as policymakers continue to weigh concerns about economic impacts related to geopolitical events, including the U.S.-Israeli war against Iran. At the same time, the Fed’s median projections and “dot plot” indicators point to a more hawkish outlook than earlier in the year. Multiple outlets report that nearly half of the 19 FOMC participants expect borrowing costs to rise by the end of the year, with nine officials indicating higher rates at year-end. The median economic projection increases the expected federal funds rate by year-end compared with the prior March forecast. In addition, the Fed raises its inflation outlook, reflecting persistent inflation pressures. One outlet notes that Warsh does not submit a dot-plot projection. Separately, markets respond to the Fed’s signal: the dollar strengthens following the decision and revised forecasts. Overall, the Fed maintains current policy while indicating that rate increases remain a possibility before year-end.
Fed holds benchmark rate steady; officials project at least one hike by year-end
The U.S. Federal Reserve keeps its benchmark interest rate unchanged at the 3.5%–3.75% range at its first policy meeting under Chair Kevin Warsh. The decision is unanimous and extends the central bank...
- The Fed leaves the federal funds rate unchanged at 3.5%–3.75% in its first decision under Chair Kevin Warsh.
- The decision is unanimous and extends a streak of rate pauses for a fourth consecutive meeting.
- FOMC participants’ projections shift toward higher rates later this year; nine of 19 officials indicate year-end rates are higher.
- The Fed’s median year-end rate projection is higher than the March projection, suggesting a higher end-of-year policy rate.
- Inflation forecasts are revised upward, and the Fed signals that a hike later this year is possible.
WASHINGTON — The U.S. Federal Reserve on Wednesday held its benchmark interest rate steady in its first rate decision since new Chair Kevin Warsh took office last month, with at least half of its policymakers anticipating a higher rate later this year. During the two-day Federal Open Market Committee (FOMC) meeting, the central bank decided unanimously to leave the rate unchanged at the 3.5-3.75 percent range, marking its fourth consecutive pause, amid lingering concerns over the economic fallout of the U.S.-Israeli war against Iran. According to the FOMC members' new median economic projection, the federal funds rate is expected to be cut to 3.8 percent at the end of this year, up from the March projection of 3.4 percent, suggesting a higher year-end rate than previously projected. The "dot plot" projection chart showed that nine of the 19 FOMC participants expected borrowing costs to be higher by year-end. Warsh did not submit a dot plot projection. The meeting came a week after the U.S. Labor Department reported that the consumer price index rose 4.2 percent in May from a year earli
7 hours agoNine of 19 officials who participate in Fed policy meetings penciled in at least one interest rate increase by year end, up from zero in March. It was Kevin Warsh’s first as Fed chair.
9 hours agoThe dollar strengthened as the Federal Reserve held interest rates steady but signaled a potential hike later this year, with policymakers raising inflation projections. New Fed Chairman Kevin Warsh's revised statement removed forward guidance, impacting market expectations. Meanwhile, other central banks like the BOE and BOJ are also navigating inflation concerns.
9 hours agoThe Federal Reserve left interest rates unchanged at its first policy meeting under chair Kevin Warsh, but nearly half of policymakers signalled they could support a rate hike later this year as inflation remains elevated.
10 hours agoMarkets had broadly expected the US Federal Reserve to keep its benchmark interest rate unchanged, extending the pause that has been in place throughout the year.
12 hours ago
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