Fed Holds Rates at 3.50%-3.75% for Sixth Straight Pause
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- The Federal Reserve held its benchmark fed funds rate at 3.50%-3.75%, extending a pause for a sixth consecutive meeting.
- Three FOMC members dissented in favor of a 25-basis-point hike while nine voted to hold — an unusually divided outcome given futures had priced just a 35% probability of a hike (CME FedWatch).
- The Fed's policy statement said inflation "remains elevated relative to the Committee's 2 percent goal" due in part to energy supply shocks, while economic activity is expanding "at a solid pace" despite Middle East conflict uncertainty.
- Bitcoin climbed above $64,400 (up over 1% in 24 hours); the S&P 500 and Nasdaq trimmed earlier losses while gold rose 1.2% on the day.
- Chair Kevin Warsh has publicly criticized the Fed's reliance on forward guidance and the quarterly dot plot, and investors are watching his post-meeting press conference for signs that the central bank's communication strategy is changing under his leadership.
Why it matters: Three dissents for a hike is a notable internal split that signals hawkish pressure remains inside the committee even as policy was held, and with the statement still calling inflation "elevated," the next move may be up rather than down. Warsh's first post-meeting press conference as Chair could also reset how markets interpret forward guidance — a communication tool he has already openly criticized.
