Economyabout 6 hours ago· 1 min read
Federal Reserve Holds Rates Steady as Powell Prepares Final Meeting; Kevin Warsh Set to Replace Him
The Federal Reserve held interest rates steady at 3.5%-3.75% on Wednesday in what may have been Jerome Powell's last meeting as chair. The Senate Banking Committee approved Trump's nomination of Kevin Warsh as the next Fed chair, with Powell planning to remain on the Board of Governors until an internal investigation concludes.
Meeting Highlights
- Rate Decision: The FOMC voted 8-4 to hold the benchmark funds rate steady, an unusually divided vote reflecting disagreement over future policy direction
- Powell's Leadership Transition: This was likely Powell's final meeting at the helm before Kevin Warsh takes over in mid-May
- Dissent: The meeting saw four dissents, unusual for Powell's tenure, with officials opposing messaging that further rate cuts could be ahead
- Powell's Plans: Powell signaled he will remain on the Board of Governors indefinitely, waiting until a Federal Reserve investigation is "well and truly over with transparency and finality"
- Economic Data: March nonfarm payrolls grew by 178,000 with unemployment slipping to 4.3%, while inflation concerns persist amid Middle East tensions
- Warsh Nomination: Senate Banking Committee approved Warsh's nomination in a party-line vote, with full Senate confirmation widely expected to follow