Bonds & Rates
Home›Bonds & Rates›Central Banks›Fed keeps rates unchanged as hawks back 25 bp hike for…
Fed keeps rates unchanged as hawks back 25 bp hike for this meeting
Three Fed members voted against the hold, and officials pointed to Middle East uncertainty and elevated inflation that could shape whether the next move comes in September.
The Federal Reserve kept its target range for the federal funds rate unchanged at 3.5% to 3.75%, but three policymakers argued for a 0.25 percentage point increase at this meeting, according to HousingWire.
Officials said economic activity is expanding despite elevated uncertainty tied in part to the Middle East conflict, while job gains have kept pace and the unemployment rate has changed little. The Fed also reiterated that inflation remains above its 2% goal, citing supply shocks and noting that the committee will work to deliver price stability.
HousingWire reports that voting against the decision were Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who preferred to raise the target range by 25 basis points. The outlet also said the longer end of the bond market has already moved, and suggested the conflict ending could allow the Fed to focus more directly on incoming jobs and inflation data.
The Fed Chair, as summarized by HousingWire, emphasized that real yields and nominal yields have risen recently, describing bond-market moves as having done much of the work for now, while the hawkish votes keep September in focus for the next potential rate change.