FOMC Meeting: Fed Holds Rates as Expected Despite Inflation Concerns
Highlights
- The Fed held rates at the target range between 3.75% and 4%.
- This follows last month's Fed rate hike.
- Fed officials continue to raise concerns about rising inflation due to the Middle East uncertainty.
The Federal Reserve held rates steady after today’s FOMC meeting. The decision follows the Fed’s September rate hike, the first time the Committee raised interest rates since 2023. The move also comes despite inflation concerns stemming from Middle East uncertainty.
Fed Holds Rates Steady Following FOMC Meeting
In a press release, the U.S. central bank said the Committee decided to keep the target range at 3.75% to 4%. Committee members voted 10 to 2 in favor of the decision, with Lisa Cook and Beth Hammack dissenting in favor of a hike.
This decision to hold rates steady at the FOMC meeting comes in line with expectations, despite inflation concerns among Fed officials. “Inflation remains elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability,” the release read.
The decision at this FOMC meeting follows the September Fed rate hike, which was the first since 2023. Notably, all Committee members voted unanimously in support of the hike at the September meeting.
Market participants will now look to Fed Chair Kevin Warsh’s FOMC press conference for insight into whether the Committee will hike rates again at the December meeting or hold rates steady.
Bitcoin Retreats Following Fed Decision
The Bitcoin price fell following the Fed’s announcement of its decision to hold rates steady at the FOMC meeting. The leading crypto is currently trading at around $80,600, up less than 1% on the day, according to TradingView data.
Bitcoin continues to trade in a tight range amid uncertainty over the U.S.-Iran war and the upcoming midterm elections, which could further shape U.S. crypto policy. BTC is down more than 4% over the last month and nearly 3% over the last week.
Meanwhile, ahead of the December FOMC meeting, crypto traders are currently betting that the Fed will hike rates. Data from the top crypto prediction market platform Polymarket shows an 82% chance of a 25-basis-point rate increase. There is only a 16% chance that the Fed will leave rates unchanged.
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