According to a report from Yahoo Finance, the Federal Reserve held interest rates steady for the third consecutive policy meeting this year, amid a surge in oil prices and increased economic uncertainty from the Iran war.
The central bank voted in a split decision on Wednesday to hold its benchmark interest rate in the range of 3.5% to 3.75%. Fed Governor Stephen Miran disagreed, preferring to cut rates by a quarter percentage point. Cleveland Fed president Beth Hammack, Minneapolis Fed president Neel Kashkari, and Dallas Fed President Lorie Logan supported maintaining rates but disagreed with including an “easing bias” in the policy statement, and thus dissented.
The last time there were four dissents was Oct. 6, 1992.
The divisions emerge as Fed Chair Jerome Powell winds down his term but announced Wednesday that he intends to remain in his seat as a governor “for a period of time to be determined.”
“I plan to keep a low profile as a governor. There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair,” Powell said in a press conference.
Warsh, President Trump’s nominee to succeed Powell, has promised significant changes at the central bank, including potentially “messier meetings … where people don’t show up with rehearsed scripts, but we can have a good family fight.”
The policy statement retained language stating that “in considering the extent and timing of additional adjustments … the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
That language is considered an easing bias — in other words, a stance on the committee that favors rate cuts. Several members of the central bank have favored changing the language to reflect that there’s an equal chance of raising rates as of lowering them.
Fed officials noted that inflation is elevated in part reflecting the recent increase in global energy prices. They also said that developments in the Middle East are contributing to a high level of “uncertainty” about the economic outlook.
