WS #6239

The Federal Reserve held rates steady at 3.50%-3.75% in its most divided decision since 1992, with 4 dissents. Powell confirmed this was his last press conference as Chair, stating he will remain as a governor after his term ends May 15. The statement upgraded inflation language to 'elevated' and cited Middle East uncertainty. Powell noted the number of officials seeing a hike as likely as a cut has increased, and that the energy surge hasn't peaked yet. This hawkish shift counters the prior easing bias and suggests rates may stay higher for longer. Separately, President Trump claimed Iran's military has been destroyed and that talks are ongoing by phone, while also stating 'it's a good time to lower rates.' The UAE announced its exit from OPEC, a major development that could reshape oil supply dynamics. Oil prices surged toward $120/barrel as the Strait of Hormuz remains effectively closed. The EU announced emergency energy cost subsidies for businesses and farmers. Bitcoin dropped to $75,000 amid risk-off sentiment. PayPal shares rose on news that Venmo will become a standalone business unit. Pershing Square USA opened 18% below its IPO price in its NYSE debut. The Fed's hawkish hold and divided vote are the dominant signals, reinforcing a bearish macro outlook for growth stocks while benefiting energy and financials. The UAE leaving OPEC adds a new layer of complexity to oil markets, potentially increasing supply but also signaling cartel fragmentation.