Fed Holds Rates Steady at First Meeting Under New Chair; Hike Likely This Year

[Anchor]

The U.S. Federal Reserve has once again kept interest rates unchanged at its first policy meeting since the inauguration of its new chair. With nearly half of the Fed governors signaling a potential rate hike within this year, major New York stock indices all closed lower.

Kim Beom-joo reports from New York.

[Reporter]

The U.S. Federal Reserve, holding its first interest rate decision meeting since Kevin Warsh took office as chair, reached a unanimous decision to keep rates on hold.

This marks the fourth consecutive time this year that rates have been held at the 3.6% level.

The decision is interpreted as a sign that the Fed intends to monitor the situation for the time being, especially as consumer inflation reached 4.2% last month, well above the Fed's 2% target.

Chair Warsh noted that high inflation has persisted for over five years, emphasizing that the Fed committee is committed to its goal of curbing inflation.

[Kevin Warsh/Fed Chair: The participants in the rate-setting meeting were clearly and unanimously in agreement that the committee must stabilize prices.]

At the same time, Fed officials hinted that, given the current circumstances, they may raise interest rates before the end of the year.

Of the 19 Fed officials who provided their individual forecasts for year-end interest rates, nine indicated that a rate hike would be necessary.

This is a significant shift from three months ago, during the early stages of the war, when not a single official predicted a rate hike.

[Jeff Ostrowski/Analyst at Bankrate: With inflation exceeding 4%, which is double the Fed's target, it is impossible for the Fed to cut interest rates.]

Market experts have raised the probability of a rate hike at the September meeting—the second meeting from now—to over 60%.

Following the news, major New York stock indices fell, with the Nasdaq dropping 1.35% and the Dow falling 1%.

Chair Warsh was the only official who did not disclose his year-end interest rate forecast, and President Trump, who has publicly advocated for rate cuts, has not yet issued a response.

(Reported by Lee Hee-hoon | Video edited by Kim Jong-mi)
※ Please note: This article was translated by AI and may contain errors.