Next Fed Meeting: When It Is in April and What To Expect on Interest Rates

• Federal Reserve officials are widely expected to hold the central bank’s key interest rate steady at their next meeting April 28 to 29.

• The Fed is worried the Iran war could cause higher inflation, and analysts have scaled back expectations for rate cuts at future meetings.

• The meeting could be Jerome Powell’s last as chair of the central bank’s board of governors.

The Federal Reserve’s policy committee next meets April 28 and 29, and officials are expected to hold the central bank’s key interest rate steady for the third meeting in a row.

The Federal Open Market Committee (FOMC) will meet to consider changes to the federal funds rate from its current range of 3.5% to 3.75%. The Fed held the rate steady at its January and March meetings. It cut the rate by a quarter point at each of its three meetings last fall, aiming to prevent a job-market slowdown from deepening. Since then, the Iran war has spiked energy prices and clouded the economic outlook.

The Fed’s rate decision and what the committee signals about its future moves will influence borrowing costs for loans, inflation, and the job market in the months ahead.

Fed officials have mostly taken a “wait-and-see” approach to assess how the economy will react to the Iran war. Financial markets are pricing in a 99% chance the Fed will hold the fed funds rate steady at its next meeting, according to the CME Group’s FedWatch tool, which forecasts rate moves based on fed funds futures trading data.

The fed funds rate drives borrowing costs on credit cards and car loans, and also filters through to mortgages and other longer-term credit. Lower interest rates encourage spending and can help boost the economy, while higher interest rates reduce demand and help lower inflation.

The war threatens to undermine both sides of the Fed’s dual mandate to keep inflation low and employment high, a concern Fed officials discussed behind the scenes at their March meeting.

In public communications, Fed officials have said they believe the central bank’s policy committee should wait to see which poses a greater risk before responding, either by lowering rates to boost employment or by raising rates to stamp out inflation if it worsens. The second option was widely considered off the table before the war, with officials mainly debating when and how much they would cut rates.

April’s meeting could be the last with Fed Chair Jerome Powell in charge, but that’s not at all certain.

Powell’s term as leader ends in May. However, Kevin Warsh, whom President Donald Trump has nominated as Powell’s successor, needs to be confirmed by the Senate in time to helm the Fed’s next meeting in June. If Warsh’s confirmation is delayed, Powell has said he would stay on as Fed chair temporarily. He could also remain on the Fed’s board as a regular member until 2028.

Powell’s tenure as chair is tied to the power struggle between President Donald Trump and the Federal Reserve over the central bank’s independence. Powell has said he won’t leave the board of governors until the Department of Justice drops its investigation into alleged cost overruns in the Fed’s headquarters renovation.

A key senator, Republican Thom Tillis of North Carolina, has vowed to block Warsh’s nomination until the White House ends the probe. Warsh’s confirmation hearing is scheduled for next week, according to the Senate Banking Committee’s top Republican.

The Supreme Court is also considering whether to let Trump fire Federal Reserve Governor Lisa Cook. The high court heard oral arguments in the case in January and is expected to rule by June on whether the unprecedented firing can proceed.

The actions against Powell and Cook have raised questions about whether the Fed can remain independent of the White House. Economists say the Fed’s independence is key to its credibility and its ability to manage inflation.

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