Fed Holds Rates Steady as Powell's Tenure Ends; Warsh Set to Take Over
The Federal Reserve kept interest rates unchanged as Jerome Powell prepared to step down as chairman after 16 years. Powell will remain as a board governor, while Kevin Warsh, Trump's pick, is positioned to take the helm amid ongoing inflation concerns and economic uncertainty.
Fed Decision & Powell's Legacy
Longtime Federal Reserve Chairman Jerome Powell took the podium one last time after another rate pause. Powell's term ends May 15 after many trials and tribulations but with the stock market performing third best for him of all Fed chairs in history at an average annual S&P 500 return of 12.9%. The Federal Reserve held interest rates steady on Wednesday, in part due to the recent rise in costs. The benchmark rate stands at a level between 3.5% and 3.75%.
Powell's Next Chapter
Fed Chair Jerome Powell said Wednesday he would stay on the Fed's board after his term as chair ends in May, but he stressed he won't be a "shadow chair." He's staying as governor. With three policymakers objecting to what they see as the Fed's "easing bias," it appears there's healthy debate and a possible turn to more hawkish views on the board as Kevin Warsh, Powell's likely successor, prepares to take the reins.
Warsh Confirmation Advance
Kevin Warsh won the backing of the Senate Banking Committee on a 13-11 party-line vote to be the next chair of the Federal Reserve.
Economic Backdrop
The solid economic performance at the outset of this year may allow the Fed to keep interest rates elevated for longer as it seeks to avert a prolonged rise in prices amid the Iran war.