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4h ago

Fed Expected to Hold Rates as Powell's Final Meeting Puts Focus on Transition

Rising oil costs with a sensitive handover limit the case for near-term cuts.

Kevin Warsh is sworn in during his nomination hearing to be a member and chairman of the Federal Reserve Board of Governors before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill, in Washington Tuesday, April 21, 2026. (AP Photo/Jose Luis Magana)
Kevin Warsh testifies during his nomination hearing to be a member and chairman of the Federal Reserve Board of Governors before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill, in Washington Tuesday, April 21, 2026. (AP Photo/Jose Luis Magana)

Overview

  • Policymakers, set to conclude their two-day meeting Wednesday, are widely expected to keep the federal funds rate at 3.50% to 3.75% with CME FedWatch and other major markets putting the odds of no change near 100%.
  • Consumer prices rose 0.9% in March and 3.3% from a year earlier, driven by higher energy costs tied to the Iran conflict, which officials warn could spill into broader prices.
  • Jerome Powell is likely presiding over his last meeting before his chair term ends May 15, as the Senate Banking Committee votes Wednesday on Kevin Warsh’s nomination after the Justice Department dropped its Powell probe on April 24.
  • Even if confirmed, Warsh would need to win over other rate-setters on the Federal Open Market Committee, and Powell could remain a governor through 2028, limiting any push for quick cuts.
  • Investors and economists urged caution, with Ray Dalio calling the setup stagflationary and warning a cut would hurt the Fed’s credibility, while a CNBC survey showed most pros expect little or no easing this year as oil keeps inflation elevated.