Federal Reserve Holds Interest Rates Steady in Powell's Final Meeting as Chair

The Federal Reserve held its benchmark interest rate steady at a target range of 3.5% to 3.75%, marking the third consecutive meeting without a change. The decision came amid persistent inflation and rising energy prices, with the vote splitting 8-4—the most dissents since October 1992.

Officials noted that inflation remains elevated, partly due to recent increases in global energy prices. The meeting was likely Jerome Powell's last as chair, with his term set to expire on May 15. During a news conference, Powell stated he plans to continue serving as a governor on the Board of Governors, a position that extends until January 2028.

He cited concerns over legal attacks on the Federal Reserve as a factor in his decision.

One dissent came from Governor Stephen Miran, who favored a quarter-percentage-point cut. They objected to phrasing about "additional adjustments" to the rate target, which implied an easing bias. The Federal Open Market Committee's statement highlighted the need to assess incoming data, the evolving outlook, and the balance of risks.

This reflected ongoing challenges, including inflation at 3.3% in March—its highest in two years—and a 50% jump in oil prices since the U.S.-Israel war with Iran began on February 28. Brent crude rose more than 5% on the day of the decision, reaching about $118 a barrel.

“I will continue to serve as a governor for a period of time to be determined.”

Powell emphasized waiting until an investigation into Federal Reserve renovations is completed with transparency and finality. He described legal attacks from officials as unprecedented in the central bank's 113-year history. " The Senate Banking Committee advanced Kevin Warsh's nomination for Fed chair in a party-line 13-11 vote, with Republicans supporting and Democrats opposing.