The Federal Reserve held its benchmark fed funds rate range steady at 3.50%-3.75% on Wednesday as expected.
Down nearly 4% ahead of the expected decision following a surge in oil prices and poor inflation data earlier on Wednesday, bitcoin remained markedly lower at $71,600 in the moments after 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 higher with a tick of 4.21%.
“The implications of developments in the Middle East for the US economy are uncertain,” the central bank said in its accompanying statement.
The vote to keep policy steady was 11-1, with Stephen Miran voting to cut interest rates by 25 basis points.
The Fed also updated its economic projections. Particularly noteworthy was a significant increase in inflation expectations – now seen at 2.7% for 2026 against 2.4% previously. However, inflation is expected to fall to 2.2% in 2027 against 2.1% previously expected.
The so-called “dot plot” continues to show expectations of one rate cut of 25 basis points in 2026 and one more in 2027.
The Fed must balance what appears to be a slowing labor market with inflation remaining well above its 2% target. Added to this is the attack in March against Iran, which has sent the price of oil to almost $100 per barrel. barrel against 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 PM ET for further insight into the central bank’s outlook.
