Federal Reserve holds rates as dot plot turns hawkish
The Fed kept rates at 3.50%-3.75% in Kevin Warsh's first meeting as chair, with a shorter statement, removal of an easing bias and emphasis on price stability signaling a firmer policy path.
The Federal Reserve kept its benchmark rate unchanged for a fourth meeting at 3.50%-3.75% in Kevin Warsh's first meeting as chair. Commentary described the latest dot plot as hawkish, while the statement was cut to about half its prior length and dropped its earlier easing bias, reinforcing expectations that rates will remain unchanged this year. Warsh's emphasis on price stability also unsettled crypto and other risk assets, as investors weighed the possibility of future tightening and uncertainty around how inflation and financial conditions may be assessed.
- dot plot: Federal Reserve officials' projections for the future path of interest rates.
- easing bias: A policy signal suggesting a central bank is inclined toward lowering interest rates or otherwise loosening monetary conditions.
- price stability: A central bank objective of keeping inflation low and predictable over time.