In a widely expected move, the Fed voted 8-4 on Wednesday to leave the federal funds rate unchanged between 3.50% and 3.75%. The four dissents were the most since 1992.
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Forget margin or options. Here's how the pros trade QQQFed Governor Stephen Miran voted in favor of a 25 bps reduction, while Beth Hammack, Neel Kashkari, and Lorie K. Logan supported maintaining rates but were against an easing bias.
Fed Holds Rates amid Divided Policy Views
The central bank’s decision came in line with CME’s FedWatch tool, which assigned a 100% probability that rates would remain steady ahead of the move. Oil and gas prices have soared in recent months from the closure of the Strait of Hormuz, elevating the risk of higher inflation.
In a press release, the Fed noted that inflation is “elevated,” while tensions in the Middle East have heightened economic certainty. During the Fed’s last meeting, the central bank said inflation was only “somewhat elevated.”
Today’s meeting marked Jerome Powell’s final one as the Fed Chair, with his term set to expire on May 15. Earlier today, Kevin Warsh received confirmation from the Senate banking committee to succeed Powell.