Fed holds benchmark rate at 3.50–3.75% as expected, likely to stay on hold for now

[The Financial News]

The Fed kept its policy rate steady on the 28th (local time), in line with market expectations. It held the target range for the federal funds (FF) rate at 3.50–3.75%.
After three consecutive rate cuts last year, the first Federal Open Market Committee (FOMC) meeting of the new year ended with a decision to pause.
Wrapping up its two-day FOMC meeting, the Fed announced this decision and assessed that the U.S. economy is showing solid momentum.
It also scaled back some of its earlier concerns about a slowdown in the labor market.
The FOMC stated, "Based on available indicators, U.S. economic activity continues to expand at a solid pace," adding, "Job gains remain at a low level, but the unemployment rate is showing some signs of stabilizing." At the same time, the committee noted, "Inflation remains somewhat elevated."
This suggests the Fed believes its two main objectives—price stability and a healthy labor market—are broadly in balance for now.
In particular, the Fed removed language from its statement that had highlighted the risk of a labor market slowdown as being greater than that of inflation. Analysts interpreted this as a signal that the Fed intends to watch developments more closely before considering any further rate cuts.
The Fed offered almost no explicit guidance on the timing or pace of future rate reductions.
Markets currently expect no rate cuts at least until June.
As has become customary under the Donald Trump administration, dissenting votes were once again recorded.
Governor Christopher Waller and newly appointed governor last year Stephen Miran both opposed the decision to hold, arguing instead for a 0.25 percentage point rate cut. Waller and Miran were both nominated by President Donald Trump.
Miran’s term ends on the 30th.
Meanwhile, Chair Jerome Powell will step down as chair after presiding over two more FOMC meetings.
The New York Stock Exchange (NYSE) traded mixed in a narrow range as investors waited for Powell’s press conference.

dympna@fnnews.com Reporter Song Kyung-jaedympna@fnnews.com Song Kyung-jae Reporter