The Federal Reserve maintained its benchmark rate for a fifth meeting, with three dissenters favoring a 25-basis-point increase.
The Federal Reserve kept its target rate unchanged at 3.50% to 3.75% for a fifth consecutive meeting, defying market expectations of a hike. The decision was decided by a nine-to-three vote, the closest margin in years, with three members dissenting in favor of a quarter-point increase.
Futures had priced in a 36% chance of a hike ahead of the meeting, up from 11% in mid-July. The two-year Treasury yield fell four basis points, while the 30-year yield rose nine, steepening the curve. The yen slipped from near 164.00 to around 163.50, down 0.24% on the day.
Fed Chair Jerome Powell avoided labeling the decision a pause and declined to specify triggers for a September move. Markets now assign an 80% probability to a hike next month, limiting the yen’s relief to a single session.