Rabobank’s Senior Macro Strategist Bas van Geffen notes the Federal Open Market Committee (FOMC) left the federal funds rate at 3.50–3.75%, with internal dissent over easing bias. He still projects two rate cuts under an incoming Chair Warsh but stresses risks are skewed toward fewer cuts. Powell’s decision to remain as governor is framed as non-obstructive to future Fed leadership.

FOMC holds rates with divided committee

"Amidst the unusually high uncertainty about the outlook, the FOMC kept the federal funds target range unchanged at 3.50-3.75%, as widely expected."

"Equally expected was Governor Miran’s dissent, who repeated his preference for a rate cut."

"Because once Warsh is appointed as next Fed chair, he will probably try to convince the other FOMC members of the need for additional rate cuts."

"Whether Warsh succeeds depends on incoming data, but Powell suggested yesterday that this could be an uphill battle."

"We still forecast two rate cuts from a Warsh-led Fed this year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)