US Federal Reserve Keeps Interest Rates Unchanged

SadaNews - On Wednesday, the US Federal Reserve (the central bank) kept the key overnight interest rate unchanged in a range between 3.50% and 3.75%, during its last official meeting under the presidency of Jerome Powell, whose term ends in mid-May 2026.

The Federal Reserve reported that recent indicators suggest that economic activity continues to expand at a strong pace, while job gains have remained low on average, and the unemployment rate has not changed significantly.

In the biggest split since the 1990s, the Federal Reserve indicated that the vote for the policy resulted in 8 in favor and 4 against, with Stephen Mohren opposing, preferring a quarter-point rate cut, while Beth Hammack, Neel Kashkari, and Lorie Logan opposed including a dovish outlook in the statement.

The Federal Reserve described inflation as "high," compared to the previous statement's description of "somewhat high," noting the impact of global energy prices.

It also confirmed that the committee is monitoring risks threatening both sides of its dual mandate, pointing out that developments in the Middle East contribute to a heightened level of uncertainty regarding economic forecasts.

The Federal Reserve emphasized that when considering the size and timing of any additional interest rate adjustments, the committee will carefully evaluate incoming data, along with the evolution of forecasts and risk balances.

Investors are keenly awaiting statements from US Federal Reserve Chairman Jerome Powell to assess the impact of the Iran war on the economy amid stalled peace talks.

Powell will chair what could be his last meeting of the Open Market Committee concerned with managing monetary policy, and he will hold the traditional press conference later today, where he may indicate a non-standard step of remaining a member of the board of governors even after his presidency ends on May 15.

Separately, the Senate Banking Committee is scheduled to vote on the appointment of Kevin Warsh as Powell's successor. The committee is expected to vote along party lines, a process that could take the entire next month.

In January, President Donald Trump announced Warsh's selection as the new chairman of the Federal Reserve. Last year, Warsh expressed his support for President Trump's calls to cut interest rates, prompting many Congressional Democrats to question his independence as chairman.