In a widely expected move, the Fed voted to leave the federal funds rate between 3.50% and 3.75%. Fed Governors Stephen Miran and Christopher Waller voted in favor of a 25 bps reduction, while the eight other committee members voted to maintain the rate.
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The Fed’s decision came in line with CME’s FedWatch tool, which assigned a 99.4% probability that rates would remain unchanged.
Fed Highlights Growth as Investors Weigh Waller’s Vote
In a press release, the central bank noted that while job gains have remained low, the economy has expanded at a “solid pace,” and the unemployment rate has shown signs of stabilizing. During the last Federal Open Market Committee (FOMC) meeting, the Fed said that downside risks to unemployment had risen in recent months.
Ahead of the meeting, investors paid particular attention to Waller’s vote given his candidacy for the Fed Chair position. Economists noted that a vote to cut rates could win him favors with President Trump, who has repeatedly called for significant rate cuts. Waller’s odds of being nominated by Trump for the position jumped to 14% from 9.5% on the prediction platform Polymarket following the Fed’s rate decision.