The nation’s central bank is expected to announce Wednesday that the Federal Open Market Committee voted to hold interest rates steady.
Fed officials this week are confronting rising inflation, a lackluster job market, and what is likely to be Jerome Powell’s final meeting as chair.
“The FOMC is likely to reiterate its wait-and-see message at its April meeting this week because the war with Iran continues to cloud the economic outlook and to present risks to both inflation and activity,” Goldman Sachs economists wrote in an April 26 research note.
Holding steady this month would be the third time the Fed rates were unchanged, as the central bank held rates unchanged at both its January and March meetings while assessing the economic impact of President Trump’s tariffs and the fallout of the Iran war.
Powell is set to step down as Fed chair when his term concludes on May 15, concluding an eight-year tenure atop the central bank. Powell is expected to be replaced by President Donald Trump’s chair nominee, Kevin Warsh, whose confirmation hearing before the Senate Banking Committee was held last week.
Warsh’s Path Eased
Warsh’s ascension as chair was made easier by U.S. Attorney Jeanine Pirro’s announcement Friday that her office is ending a probe of Powell over the renovation of the Fed’s Washington, D.C., headquarters.
For his part, Powell criticized the investigation as politically motivated, following Trump’s pressure on him to cut rates.
U.S. Sen. Thom Tillis, R-North Carolina, initially said he would block Warsh’s nomination until the Justice Department resolved its investigation into Powell over the renovation of the Fed’s Washington, D.C., headquarters.
Tillis said on Sunday that he is prepared to move forward with Warsh’s nomination, now that the investigation has ended.
Once his term as chair ends, Powell does have the option to remain as a Fed governor, but he has not announced his intentions yet.
