Mike Milligan breaks down the Fed's decision to hold rates at 3.5%-3.75% while three regional presidents dissented for a hike, the first three-way dissent since 2016. New Chair Kevin Warsh called it a "good family fight" and suggested rising Treasury yields are already tightening financial conditions, so the Fed may not need to raise rates further.
What we got was even more unusual. The FOMC voted 9-3 to hold the Fed funds rate in the target range of 3.5% to 3.75%, the 5th consecutive meeting with no change. But 3 regional Fed presidents— Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of Dallas— dissented and voted for a quarter-point hike. That is the first time since 2016 that 3 FOMC voters have dissented together on the same side of a policy decision. The new Fed chair, Kevin Warsh described it at the press conference as, quote, a good family fight. Then he said something that moved the market. He argued that the recent rise in long-term Treasury yields has already tightened financial conditions on its own, so the Fed does not necessarily need to hike again right now because the bond market is doing part of the work for them. That is a very different framework than what we've had in years.
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
