Powell poised to keep rates unchanged in what might be his last meeting; Warsh advances
The Federal Reserve is widely expected to leave interest rates unchanged at its latest policy meeting on Wednesday afternoon, as Chair Jerome Powell oversees what will likely be his final decision leading the central bank.
FILE – Federal Reserve Chair Jerome Powell speaks at the Federal Reserve, Wednesday, Dec. 10, 2025, in Washington. (AP Photo/Jacquelyn Martin, file)
Policymakers are expected to keep the benchmark rate in the 3.5% to 3.75% range, continuing a cautious approach as they weigh stubborn inflation against signs of economic resilience.
Despite steady job growth and a relatively stable economy, inflation remains above the Fed’s 2% target, fueled in part by rising energy prices amid the war with Iran.
As a result, officials are signaling that rate cuts are unlikely in the near term, opting instead to wait for clearer signs that inflation is cooling.
Powell’s tenure nearing an end
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)
The meeting carries added significance because it is expected to be Powell’s last as Fed chair, with his term set to expire on May 15.
Powell’s tenure has spanned major economic shocks, including the coronavirus pandemic, inflation surges, and global instability. While inflation has eased from its peak, it remains a central challenge for the Fed.
In recent months, Powell has also faced political pressure and scrutiny, though a Department of Justice probe tied to Federal Reserve operations has since been dropped, removing one potential complication as his term winds down.
What comes next for the Fed
Attention is now shifting to what happens after Powell steps down. President Donald Trump’s nominee, former Fed governor Kevin Warsh, is moving closer to confirmation and could usher in a new direction for monetary policy.
The Senate Banking Committee voted on party lines Wednesday to approve Warsh as the next chair of the Federal Reserve to replace Powell. The vote was 13-11, with all Republican senators voting in favor and Democrats opposed.
Warsh, along with Trump, have criticized Powell’s leadership. He has called the inflation spike to 9.1% in 2022 the central bank’s biggest policy mistake in four decades.
A vote on his nomination probably won’t take place until next month, but he could be confirmed by the time Powell’s term as chair ends.
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EDITOR’S NOTE: The Associated Press contributed to this report.