The Federal Reserve held its benchmark interest rate at 3.50% to 3.75% for a fifth consecutive meeting, but three officials dissented in favor of a quarter-point increase, signaling the next move could be a hike. The Federal Open Market Committee approved the decision by a 9-3 vote, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan preferring to raise rates to 3.75% to 4.00%. It was the first time since 2016 that three policymakers dissented in the same policy direction. The Fed noted that economic activity continues to expand at a solid pace, unemployment remains relatively stable, and inflation is still elevated, with annual inflation at 3.5%, well above the 2% objective. The dissents shift the policy debate away from rate cuts and toward how long the Fed can tolerate above-target inflation, especially with higher energy costs and resilient investment demand potentially keeping price pressures elevated.
SoFi Technologies Inc.Fed holds rates steady with hawkish dissent favoring a hike, signaling higher-for-longer rates, which pressures SoFi's lending margins and growth.