The Fed announced that it will hold key interest rates at 3.50% to 3.75%.
The U.S. Federal Reserve left interest rates unchanged in Kevin Warsh’s second decision as the Fed chair on the back of elevated inflation and a strong job market. The Federal Open Market Committee approved the following statement for release by a 9 – 3 vote.
The choice to maintain rates represented the fifth consecutive pause by officials. This move comes as the Fed pivots its attention toward inflation due to energy price fluctuations resulting from the conflict in Iran, while the job market remains resilient.
In their post-meeting statement, officials said inflation remained elevated and vowed to deliver price stability.
“Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability,” as per the Fed’s monetary policy statement.
How Markets Reacted To The Fed
The S&P 500 was down 0.2%, Nasdaq Composite was last down 0.1% and the Dow Industrials fell 1.23%.
Treasury yields were also higher. The 2-year yield was down nearly 3 basis points at 4.271% The rate on the 10-year Treasury was up 2 basis points at 4.632%.
At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.4%, while the Invesco QQQ Trust (QQQ) lost 0.2%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘ bearish’ territory.
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