The Federal Reserve held rates steady at 3.5 percent to 3.75 percent Wednesday, but the vote was anything but routine: four officials dissented, the largest number of dissents at a Fed meeting since October 1992.
The split came at what is likely Jerome Powell’s final meeting as chair, with Kevin Warsh moving toward Senate confirmation as his successor. One dissenter, Governor Stephen Miran, wanted a quarter-point cut. Three regional Fed presidents, Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas, supported holding rates but objected to language that kept an easing bias in the statement.
- The disputed sentence said the committee would assess the “extent and timing of additional adjustments” to rates, wording some officials saw as leaning toward another cut.
- The Fed said “inflation is elevated,” partly because of higher global energy prices.
- March payrolls rose by a better-than-expected 178,000, while unemployment slipped to 4.3 percent.
- Markets had priced in a 100 percent chance of no rate change and were expecting no moves for the rest of 2026 and well into 2027.
Powell also made clear he does not plan to leave the Fed’s Board of Governors when his chair term ends May 15. He said he will remain until an investigation into the Fed’s headquarters renovation is “well and truly over, with transparency and finality,” after what he called “unprecedented” legal attacks on the central bank’s independence by the Trump administration.
The decision matters for the balance of power inside the Fed. Powell can serve as governor until January 2028, and by staying he denies President Donald Trump an immediate opening to appoint another board member. Warsh, whose nomination advanced out of the Senate Banking Committee in a 13-11 party-line vote, would replace Powell as chair but not add a new Trump-appointed seat as long as Powell remains on the board.
Powell said he had planned to retire and rejected the idea that staying was political: “They have left me no choice but to stay until I see them through.” The full Senate is expected to vote on Warsh’s confirmation next, setting up a Fed leadership handoff with rates unchanged, inflation still above target and the committee more visibly divided than it has been in decades.
