FOMC Leaves Rates Unchanged as Fed Leans Hawkish In Kevin Warsh’s First Meeting

The Federal Reserve has kept interest rates steady for the fourth consecutive Fed meeting this year amid inflation concerns due to the U.S.-Iran war. This also comes at Kevin Warsh’s meeting as the Fed chair, with the market now set to turn its attention to his press conference for guidance on future rate decisions.

Fed Meeting: FOMC Keeps Interest Rates Steady

In a press release, the Fed announced that it would maintain the target range for the federal funds rate at 3.50% to 3.75%. This marks the fourth consecutive Fed meeting at which the Committee has decided to keep rates steady, as officials raise concerns about rising inflation. All 12 voting members voted in favor of the decision.

The Fed rate decision also comes in line wth expectations as the market had already fully priced in the likelihood that the U.S. central bank will hold rates steady. However, experts such as Citadel Securities have warned about a potential Fed rate hike by year-end.

The market will now focus on Kevin Warsh’s FOMC press conference for hints about the Fed’s current stance and whether they are dovish or hawkish. The Fed chair had remained largely muted on his stance on monetary policy prior to his first Fed meeting as chair. His press conference has also become key, as the FOMC statement offered little insight into its monetary policy stance, and the Fed dropped its easing-bias comments.

Meanwhile, it is worth noting that some Fed officials had before now signaled that they may support a hike if inflation persists. However, with a U.S.-Iran peace deal in place, inflation could cool off as oil prices drop, which could prompt these officials to change their stance on monetary policy.

At the same time, U.S. President Donald Trump continues to push for lower interest rates. However, the president has suggested that he would not press Warren to lower interest rates as he did with Jerome Powell.

A Hawkish Dot Plot

The economic projections released following the Fed meeting signaled that most Fed officials are currently hawkish. According to the ‘dot plot’ projections, nine of the 18 Fed officials have penciled in at least one hike this year.

Furthermore, six of these nine officials project multiple rate hikes this year, while one FOMC participant expects a cut. One participant didn’t pencil in their projection, with this official likely to be the Fed chair. The BTC price has dropped amid the Fed rate decision, seeing as most officials are leaning hawkish.

The leading crypto is currently trading at around $65,200, down from an intraday high above $66,000, according to TradingView data. Bitcoin has, in recent times, seen a downtrend following every Fed meeting.