Fed Holds Rates Steady, Stocks and Gold Surge! Three Hawkish Officials Cast Dissenting Votes, First Since 2016

The U.S. Federal Reserve (Fed) announced early Thursday (30th) Taiwan time at 2 a.m. that it would maintain its benchmark interest rate at 3.50%–3.75%, marking the fifth consecutive hold, largely in line with market expectations. After the decision, which avoided an 'unexpected' rate hike, U.S. stocks and gold prices surged, while the dollar index dropped sharply. At the time of reporting, Taiwan's stock futures night session rose over 600 points, breaking the 41,000-point threshold.

The Federal Open Market Committee (FOMC) voted 9 to 3 to keep the target range for the federal funds rate at 3.5%–3.75%, supporting the Fed's dual mandate, and will continue its policy of maintaining ample reserve balances in the banking system.

The policy statement noted that despite elevated uncertainty stemming from the Middle East conflict, economic activity continues to expand at a solid pace. Productivity growth and capital investment remain strong. Employment growth continues to keep pace with labor force growth, while the unemployment rate has changed little.

The statement emphasized that inflation remains elevated relative to the Committee’s 2% longer-run goal, partly reflecting supply shocks in specific sectors such as energy that have pushed prices higher. 'The Committee is committed to achieving price stability.'

The three dissenting votes came from regional Fed bank presidents Harker, Kashkari, and Logan, who advocated for a 25-basis-point rate hike. This marks the first time since 2016 that the Fed has seen three officials cast identical dissenting votes in a single policy meeting, reflecting growing internal divisions and potentially fueling market bets on rate hikes in the coming months.