The first meeting of the Federal Reserve’s policy making Federal Open Market Committee (FOMC) under the chairmanship of Kevin Warsh concluded with keeping rates unchanged in a 12-0 vote.
As a result, the target range for the federal funds rate remains at 3.5% to 3.75%. In announcing its decision, the FOMC offered a considerably shorter explanatory statement on its actions when compared to previous decisions. The statement also did not have a forward-looking guidance.
“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East,” said the FOMC’s statement. “Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated relative to the Committee’s 2% goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability.”
The FOMC meeting was unique for having Warsh’s predecessor Jerome Powell present as a Fed governor. While former Fed chairmen traditionally leave the central bank after their term expires, Powell opted to stay, citing threats against him from the Department of Justice.
Stephen Miran, who left the board of governors last month after Warsh was sworn in as chairman, returned this week to the hedge fund Hudson Bay Capital Management as a senior strategist. Miran was working at Hudson Bay when President Trump hired him to become chairman of the Council of Economic Advisers. He took a leave of absence from the White House position last September to fill a Fed board of governors vacancy, and later resigned from the Executive Branch in January.
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