The Federal Reserve left its benchmark fed funds rate range unchanged at 3.50%-3.75% on Wednesday, a move that markets had expected almost unanimously.
“Economic activity is expanding at a solid pace despite increased uncertainty, partly due to the conflict in the Middle East,” the press release states. “Inflation remains high relative to the committee’s target of 2 percent, partly reflecting supply shocks that have driven price increases in certain sectors, including energy.”
“The committee will deliver price stability,” it added.
Policymakers are increasingly leaning toward a rate hike this year and expect the Fed Funds rate to be 3.8% by the end of 2026, up from 3.4% in the March projection. Easier monetary policy won’t come anytime soon, as they expect interest rates to be 3.6% for 2027 and 3.4% in 2028, both higher than their previous guidance.
They also see higher inflation, with personal consumption expenditures (PCE) rising 3.6 this year and core PCE inflation at 3.3%, compared with a forecast of 2.7%-2.7% in March.
Traded about $66,000 earlier, bitcoin fell to $64,800 in the minutes following the decision and recently stabilized around $65,300. The S&P 500 and Nasdaq 100 both fell nearly 1%, erasing earlier gains.
