Diamond Hands Energy: Fed HODLs Rates at 3.75% While Bulls Cry for Cuts

The Federal Reserve just dropped minutes from its February and March discount rate meetings, and wouldn't you know it—everyone voted to keep the primary credit rate locked at 3.75%. No rug pull here, just good old-fashioned diamond hands energy. Actually, that's a bad analogy. Diamond hands would mean they'd eventually flip. These folks are genuinely just staring at the chart.

The meetings, held on February 9 and March 18, saw all 12 Reserve Banks agree: no changes needed here. At the March 18 joint session with the FOMC, officials maintained the federal funds target range at 3.5% to 3.75%, and the Board approved keeping interest on reserve balances steady at 3.65%. For those tracking the spread at home, put that in your spreadsheet and light it up.

On the economic front, directors reported stable conditions across most districts. Labor markets showed limited hiring, low turnover, and modest wage growth. A few districts flagged difficulties hiring specialized roles—healthcare seems to be the troublemaker here. Apparently, robots can do a lot of things, but dealing with insurance paperwork? Still waiting on that innovation.

Directors also noted sustained business investment in technology and AI aimed at boosting efficiency. But before you start panicking about robots taking jobs, the report notes AI's direct impact on labor remains limited for now. So sleep easy, degens. Your prompt engineering skills are safe. For now.

Tariff-related price pressures have moderated since earlier assessments, but rising nonlabor costs in healthcare and energy are still making themselves comfortable. Think of them as that friend who came over during COVID and never quite got the hint to leave.

The Board renewed existing formulas for secondary and seasonal credit programs, keeping the secondary rate at 4.25%—that's 50 basis points above primary credit, for those keeping score. Basic math for the apes in the back: 4.25 minus 3.75 equals... actually, do your own calculations. We're not your parents.

Chair Jerome Powell, Vice Chair Philip Jefferson, and all present governors voted unanimously at both meetings. Governors Christopher Waller and Stephen Miran skipped the February session but showed up in March. Waller and Miran going MIA in February was giving main character energy—too bad the plot didn't involve any rate cuts.

The continued rate hold signals the Fed remains cautious about easing despite market expectations for cuts later this year. Traders will now watch upcoming inflation data to see if the FOMC shifts its stance. Because apparently, waiting is the new policy. And in crypto, we know a thing or two about waiting. Some of us are still waiting for our portfolios to recover from 2021.