- The Federal Reserve left its benchmark federal funds rate unchanged, but signaled a tilt toward hiking rates later this year.
- Policymakers now project higher interest rates through at least 2028, expecting stickier inflation for this year.
- Bitcoin and major U.S. stock indexes slipped after the decision, as investors turned their focus to new Fed Chair Kevin Warsh’s first post-meeting press conference and potential shifts in communication strategy.
The Federal Reserve left its benchmark fed funds rate range unchanged at 3.50%-3.75% on Wednesday, a move markets had expected nearly unanimously.
"Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East," the press release said. "Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy."
"The Committee will deliver price stability," it added.
Policymakers are increasingly lean towards a rate hike this year, expecting the fed funds rate at 3.8% at the end of 2026, versus a 3.4% in the March projection. Easier monetary policy will not come anytime soon as they expect rates at 3.6% for 2027 and 3.4% in 2028, both higher than their previous guidance.
They also see higher inflation, with personal consumption expenditure (PCE) rising 3.6 this year and core PCE inflation at 3.3%, compared to a forecast of 2.7%-2.7% in March.
Trading around $66,000 earlier, bitcoin BTC$65,388.42 fell to $64,800 in the minutes following the decision, and recently stabilized around $65,300. The S&P 500 and Nasdaq 100 both dropped nearly 1%, erasing earlier gains.
