finance
Fed Holds Interest Rates Steady; Biden Renominates Powell
The Federal Reserve kept interest rates unchanged in Jerome Powell's final meeting as chair, amid a high number of dissents and ongoing inflation pressures. Powell stated he will remain a governor until at least 2028 to protect the central bank's independence. Incoming chair Kevin Warsh faces challenges from elevated inflation and potential White House pressure.
Apr 29, 4:34 PM·3m read5 sources
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The Federal Reserve held interest rates steady at around 3.6% during its latest meeting, marking the third consecutive hold amid persistent inflation above the 2% target. Chair Jerome Powell, in his final press conference as leader, announced he will remain on the board of governors after his term as chair expires on May 15, 2026.
This decision breaks with tradition, as Powell cited concerns over legal attacks threatening the Fed's ability to conduct policy without political interference. The meeting saw a notably high number of dissents, with Cleveland Fed President Beth Hammack, Minnesota Fed President Neel Kashkari, and Dallas Fed President Lorie Logan objecting to language in the post-meeting statement that implied an easing bias.
Fed Governor Christopher Waller also shifted to a more hawkish stance, warning that repeated economic shocks could embed higher inflation.
Powell expressed worry that attacks on the Fed are battering the institution, stating his intent to stay until an investigation into the Fed’s headquarters renovation is complete. His term as governor extends to January 2028, though he may not serve the full duration. This situation echoes 1948, when Marriner Eccles resigned as chairman but remained on the board until 1951.
“My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors," Powell told reporters. President Trump criticized Powell's decision on social media, posting that Powell wants to stay because he can’t get a job elsewhere. Trump appointed Powell in 2017 but has feuded with him over rate policies during his first term.”
The Senate Banking Committee advanced Kevin Warsh’s nomination as the next Fed chair on a 13-11 party-line vote, the first such partisan split for a Fed chair nomination. Warsh, a former Fed governor from 2006 to 2011, pledged a “regime change” including ending forward guidance and the dot plot.
